Cable moving closer towards a test of its 100-day moving average
There is still no fighting the run higher in cable for now, as the pound surges ahead to start the European morning. I’m not seeing any specific headline triggers for the move but buyers are now looking to keep a firm break above the 1.2500 level.
In turn, price action is now moving closer to the 100-day MA (red line) @ 1.2573.
That will be a key technical resistance to watch out for in the sessions ahead. The level will provide sellers with an area to lean on before getting towards April highs @ 1.2643-48 near the 200-day MA (blue line) seen @ 1.2671 currently.
Earlier in the day, there is a report
by The Times suggesting that the UK may compromise a little if the EU is willing to move their red lines on Brexit. There wasn’t much of a reaction then but it is something to take note of.
Despite the more positive suggestion, it is still going to be a tough period for Brexit negotiations this week and it remains to be seen if both sides can bridge the gap before Johnson plans a visit to Brussels later on in the month.
Remember, the deadline for extending the Brexit transition period is on 30 June so this is likely to come right down to the wire. In the meantime, headlines are going to make it tricky to navigate but if there’s anything we have learnt on Brexit, is that any early optimism tends to be misplaced for the most part so let’s see if that will be the case again here.