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GBP/USD sees 50-pip gap on Brexit convulsions, pinned to 1.3000

  • Cable sticks to 1.3000 as Brexit headlines fail to spark a run.
  • Hopes for a last-minute Brexit deal are beginning to wane once more in markets, and last week’s bounce could see challenges.

The GBP/USD has kicked off the new trading week with a 50-pip gap into 1.3020, but as markets stretch out after the weekend the Cable is resuming a familiar cycle around the 1.3000 handle.

Brexit: negotiations are “ongoing”

Brexit headlines over the weekend have spread traders’ hopes right down the middle, with early reports that the UK’s Prime Minister Theresa May secured concessions on the UK remaining in the customs union post-Brexit, only to have hopes shot in the foot once again by Downing Street, and Cable traders head into a new trading week once again being left to twist in the breeze of vague-yet-hopeful regular announcements of “progress” by Brexit mechanics, but with little real developments.

Monday sees little on the docket except for the UK’s October Markit PMI expected at 09:30 GMT, and forecast to dip to 53.3 (previous 53.9), and later this week will be seeing the UK’s latest GDP figures, but for now investors’ focus will be remaining on muddled Brexit headlines as the clock continues to wind down chances for a workable EU-UK divorce arrangement.

GBP/USD levels to watch

As noted by FXStreet’s Yohay Elam, the Cable could find itself heading in either direction, as technical boundaries are building up on either side of current action: “1.3240 was a swing high in mid-October and 1.3300 was the peak in September and the is also a round number. Higher above, we are back to levels last seen in July, such as 1.3360. On the downside, 1.2925 was the low point in early October. It is followed by 1.2850 that capped the pair before the recent upswing and also provided support in late August. 1.2700 was the trough last week.”

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