GBPUSD, EURGBP & UK100, H1
The UK and EU have agreed on a framework for their future relationship, which has been agreed at the negotiators’ level and agreed in principle at the political levelsubject to the endorsement of leaders, according to a tweet from European Commission President Tusk. Regarding the key Irish border issue, the backstop to guarantee the Irish land border remains open and free flowing remains, but, as the paper states, with a pledge for “… facilitative arrangements and technologies” to be “also considered in developing any alternative arrangements for ensuring the absence of a hard border on the island of Ireland on a permanent footing.” This is aimed at appeasing the Eurosceptic camp and Northern Ireland’s DUP. Prime Minister May will address the House of Commons later. The news has sparked a 1%-plus rally in Sterling, as the announcement is taken as a sign that the odds for a no-deal Brexit have abated, although it still remains uncertain whether the deal will pass in the UK’s parliament.
EURGBP drifted to 0.8840, while UK100 has settled around 6960 area. Cable rallied by over 1% on Brexit news in making a one-week high at 1.2928. Cable reversed more than 50% of the losses seen since November 14 by also breaking the 200-period SMA. Despite the strong rally, 1.2900 remains a strong Resistance, hence a closing above it, at the top of the hour, could suggest further gains up to 1.2940-1.2957 area, which are set at 61.8% Fib. level and November 9 low. Immediate Support is set at 1.2860, while on the break of it, we could see the pair moving further down to Support at 1.2826.
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Andria Pichidi
Market Analyst
HotForex
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