Cable spiked higher towards the 1.2500 level before plunging lower and is now moving back up again
Cable moved to a high of 1.2505 just mere minutes before Tusk’s comments hit the wires and this was the one which really triggered the algos and what not have you in my view:
“UK has not come forward with a realistic and workable proposal”That saw cable move down to a low of 1.2409 (Bloomberg price, may be different depending on your broker) before spiking back up to 1.2460-70 levels and is now pushing the agenda towards the 1.2500 handle again.
So, what exactly does Tusk’s remarks mean? In short, I don’t think they mean much.
He’s just merely trying to put pressure on Johnson to put forward a proposal before the European Council summit next week but even if Johnson comes up with one on deadline day itself, there’s no way European leaders will ignore it.
In the bigger picture for cable, price is now contending with key resistance from the 38.2 retracement level @ 1.2502. If buyers can hold a break above that, expect the pound to pick up further gains along the way as the tide looks to have shifted to favour buyers.