GBP in consolidation mode as a lower risk of no deal suggests more upside - eventually
We have seen some strong price action to the upside in GBP, both against the USD and the EUR, though we have also come up against some notable resistance levels which may have put a near term cap on the market for now.
This has been a big week in the UK, and while it may be significant that the UK parliament has voted to avoid a no deal Brexit, the current default position is that on 29 March, the UK leaves the EU with no deal in place. This now looks set to be extended out to the end of June, though this decision is solely in the hands of the EU, and there are no doubt plenty more twists and turns ahead.
Over the weekend, we expect to hear a host of headlines and reports from where we go from here, so naturally, GBP bulls may be a little reluctant to push aggressively higher today, though early price action has seen strong demand coming in ahead of the 1.3200 level in Cable.
EUR/GBP is also trying to push back towards the 0.8600 level, yet sellers are quick to step in here also to maintain the pressure on 0.8500. 0.8500-0.8475 looks very strong, with dips into this region having failed to hold. As such, this will provide some support for now and may well be the reason as to why EUR/USD is looking better bid at present.
Through 0.8475, we note key levels at 0.8400 and 0.8300-10, so these need to be respected if we do get an impulsive push lower.
Cable topped out ahead of 1.3400 this week, and strong resistance here lies just above the figure level and we have retraced somewhat from here since.