GBP/USD touches a high of 1.3082 on the day
Price is now testing the 100-hour MA (red line) @ 1.3174 and threatening a break above that. Hold a break above and the near-term bias in the pair turns more bullish. The pound is playing a bit of a catch up game on the day as it seeks to pare earlier losses against the dollar and other major currencies. The quid started on the back foot today as Brexit negotiations between the UK and the EU comes to a standstill with the talks being pushed to Wednesday now.
With price holding onto the 100-day MA and 200-hour MA (blue line) in trading earlier today, a move back above the 100-hour MA is a good set up for buyers to retest last week’s highs near 1.3250 before a test of the September high near 1.3300 will be called upon.
There remains some key sticking points in Brexit negotiations with regards to the Irish backstop/border and now a UK-wide customs agreement, but against the dollar today just about anything else will rally.
For now though, let’s see if pound buyers are able to take out the 100-hour MA. In the event of a break, barring a capitulation in the dollar, it’s hard to see the pound rally too much with risks of Brexit talks facing further pauses/setbacks set to come on Wednesday.