The pound is holding gains against the pound and dollar since mid-September. EURUSD has been one at crossroads on the back of deal optimism. The final round of UK-EU talks begun last week ahead of October 15 EU leaders’ summit. We don’t expect an outcome this week and have to wait until the last minute.
On Saturday, the President of the European Commission, Ursula von der Leyen, and the UK Prime Minister, Boris Johnson, spoke about the state of play in the negotiations on the future relationship between the UK and the EU. They agreed on the importance of finding an agreement, if at all possible, as a strong basis for a strategic EU-UK relationship in the future.
What’s next? The pound traders focus on the meeting between EC Commission President Ursula Von Der Leyen and Boris Johnson this Saturday. This event could raise the GBP volatility, but we remain neutral on EURGBP’s trend.
Data review: UK GDP was revised slightly higher, and Manufacturing recovery continues in September. On top of these, the expansion of the UK service sector remains marked in September.
Commenting on the data Duncan Brock, Group Director at the Chartered Institute of Procurement & Supply, said, “Manufacturing made solid progress towards recovery in September, with just a minor step back from August’s two-and-a-half-year index high.”
Data preview: On the data front, we will see August GDP and Industrial Production on Friday.
The lower lows and lower highs pattern on the four-hour chart are still intact. Watch out for resistance at 0.9175 and 0.9220 if the price is moving higher. Flipside, 0.9000, is pivotal. Below here, support exists at 0.8960 and .08860.
The pound traders focus on the meeting between EC Commission President Ursula Von Der Leyen and Boris Johnson this Saturday. Until such time we remain neutral.
It is important to always keep in mind the risks involved in trading with leveraged instruments.
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