Technical Analysis

Cable climbs to fresh one-week high as EU reaffirms commitment to reach Brexit compromise

GBP/USD surges to a high of 1.3050 on the session

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You can take the EU remarks with a view of the glass being half-full or half-empty, but pound traders are certainly siding with the former as we see cable push to a fresh one-week high of 1.3050 in European morning trade now.

In short, the remarks by European officials in the past hour are nothing new – really, everything that is said has already been said before in the past – but they come at a tense time where there is still a sense of limbo surrounding Brexit talks.

So, the affirmation that they are going to continue talking appears to be what is soothing pound traders right now. Barnier made mention that “an agreement is within reach” but also said that “level playing field remains a fundamental concern”.

Hence, the narrative of the glass being half-full or half-empty for pound traders.

Quite frankly, I don’t see the EU’s remarks as being a game-changer but amid the weakness in the dollar today, it is important to be wary of changes to the technical picture.

In that lieu, the jump higher in cable also comes as we see price action clear 1.3000 but also the daily trendline resistance from 1 September – seen @ 1.2993 today.

That is perhaps helping to trigger some stops on the way up as well, though there is still some short-term resistance seen closer to 1.3064-83 in the pair. As such, that will be the next key region to watch if buyers are to truly aim for a breakout.

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