GBP/USD pares the jump earlier to 1.3494 as price retreats back to 1.3450
The pair got a jump from the earlier headline here, before giving back all of the gains now as we see a retreat upon nearing a test of 1.3500. There is also key daily resistance from the 1 September high @ 1.3483 to be mindful about ahead of the close today.
So, what's next for the pound?
It is all about Brexit headlines now ahead of the weekend and expect there to be more rumours before the day reaches a conclusion. It is pretty much a coin flip as to what we may get later today but the weekend could present a different state of play.
The latest story may suggest that a deal is "imminent" but so far no other sources are corroborating with that, especially prominent UK and EU journalists.
That might explain the lack of follow through on the push above upon nearing key technical levels once again.
As for downside risks, the 100-hour moving average (red line) is one to watch before getting to the 200-hour moving average (blue line). Beyond that, the key line in the sand will be the recent consolidation range support at 1.3290-00.
That said, any major trip lower is likely to come if we see weak hands in anticipation of the weekend risk and/or negative Brexit headlines to follow later today.
Otherwise, this continues to look a lot like a market that is itching to buy the pound and the fact that price action is still favouring buyers above 1.3400 (albeit, some of that is from dollar weakness as well) reflects that sentiment.
As for what we can expect moving forward on Brexit and the pound reaction, you can check out my earlier post in the day here.
