The British Pound rallies towards 1.32000 as investors price in a Brexit deal as soon as next Monday. Investors seem optimistic about a soft Brexit deal between the EU and Pound given that both sides are ready to make certain compromises. Most recently, Bloomberg News reported that EU is ready to offer 'a compromise Brexit deal” allowing the U.K to maintain a number of it's pre-Brexit customs arrangement (Decambre, MarketWatch). The Pound was also supported by a declining U.S Dollar which is retracing from it's 7-week high formed on Tuesday. For today, investors will need to keep an eye on the U.S CPI figures which will surely affect the price action of the U.S Dollar and thus the price action of the Cable.
Technically, the British Pound broke above the 1.32214 resistance level but fell back down. Given the strong fundamentals surrounding the Pound, investors will likely have a second go in trying to break above 1.32214. A successful break above this level will pave the way for a rise towards the September highs around 1.32904. Keep in mind that before pushing higher, the pair might test the 13-period moving average for support. A successful rejection of the 13-period moving average will mean that the strong bullish momentum is still in play, giving investors more reasons to push the pair towards the September highs.
Support: 1.32179 1.31811
Resistance: 1.32214 1.32904