Sellers are still in near-term control in GBP/USD
The spike higher on the news here helped to see cable run up to a high of 1.2291 but buyers fell short of testing/breaking the key hourly moving averages near 1.2294-97.
This means that sellers are still in near-term control of the pair as price fades back towards 1.2250 levels currently.
The key question in all of this is does the report represent a significant game changer in Brexit talks between the EU and UK?
It is certainly a breath of fresh air amid talks that look like they’re going nowhere but I reserve my doubts about how plausible and how workable the concession is.
And until we hear from official sources, it’s hard to place much into the report above to count that as an official stance being taken up by European officials.
The offer itself might sound great on paper as it may be a sign of trying to work towards getting a deal, but if anything else, it could also be in part shifting the blame back to Boris Johnson as the offer still isn’t exactly what he wants.
We’ll have to see how things go over the next few days but there’s no doubt that this is definitely a volatile period for the pound. In any case, sellers remain in near-term control for cable now so there isn’t much of a significant upside break to chase for now.