Wednesday, October 16, 2019

GBP/USD

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Fundamental Highlights

The Pound surged after reports that the EU and the UK are closing on a draft Brexit deal, however the DUP is still playing hardball. DUP's leader Arlene Foster has denied claims that the party has agreed to support an arrangement where Northern Ireland would stay in the UK customs territory but adhere to the EU customs rules on tariffs. The British Pound will likely come under pressure if Johnson fails to get DUP's support. However, if Johnson carries the day in parliament, the resulting Brexit optimism would push the Cable higher. Apart from the Brexit-related news flow, the pair may also take cues from today’s UK CPI data and later in the US session, BoE Gov. Carney will be giving a speech regarding monetary policy.

Technical Analysis

The Cable bulls broke above 1.2710 and touched 1.28 before finding some resistance. As long as the recent trend holds, the bulls will remain in control pushing price higher. A break above 1.28, will open doors for a possible 1.2885 retest. However, if the bears manage to pull the price back below 1.2710, then a deeper recovery will be a likely scenario.

Support: 1.2710 / 1.2560
Resistance: 1.28 / 1.2885

Chart (H4)
GBPUSD