GBP/USD falls from 1.3440 to 1.3362 before paring the drop as traders sort out Brexit headlines in thinner market conditions
The pound is looking a little messy in the past hour or so as a rehash of the headline that the EU has rejected the latest UK proposal on fisheries (already out since yesterday here), weighed on the quid with cable falling all the way to 1.3362.
After that, a Reuters headline mentioned that the "EU is willing to accept 25% reduction in UK waters catch" - which is no change to their stance whatsoever from here.
Yet, the pound got all jumpy and erased the earlier drop in a push from 1.3400 to 1.3447.
I'll cut this short. There is no change to the status quo since the weekend. The only key story now is that we know Johnson and von der Leyen has spoken twice since yesterday and whether or not that is a good thing, remains up for interpretation.
As for the pound, the thinner market conditions this week isn't helping. As such, it is easy to envisage price action being jerked around by headlines - leading to exacerbated reactions such as the ones we are seeing in the past hour of trading.
As for the cable chart, price action is now sitting in between the key hourly moving averages again and that suggests the near-term bias is more neutral.
We're going to have to wait on more key developments to break out of this funk it seems.
