The pound is one of the top performers today, alongside the aussie and kiwi
Cable is trading to fresh highs since April 2018 above 1.3600 but that also owes partly to the weaker dollar story. The pound on its own is trading higher on the day and that is more clearly reflected in EUR/GBP and GBP/JPY.
The former is seeing price fall back below 0.9000 and is now challenging a push below the 200-day moving average at 0.8989:
There are growing whispers that talks are headed in the right direction and a deal may arrive over the weekend and if not, surely some time before the 31 December "deadline".
On the EU side though, EPP Group chairman, Manfred Weber, is putting forward a proposal that there needs to be a Brexit agreement by this Sunday, otherwise a deal cannot be properly scrutinised before the year-end.
The European Parliament just issued a statement on that here:
But frankly, I believe a lot of this is semantics and at the end of the day, it comes down to the willingness of both sides to push forward any makeshift deal or technical agreement.
The details don't matter anymore at this stage. It is all about political will. Or at least that is how the market will be viewing it as we come down to the final stages.
The real concern for the pound is that all off this may in the end turn out to be a 'buy the rumour, sell the fact' play. Especially once the details of any deal surfaces and the market will be less convinced that this is yet another political charade.
We'll see in time but for now, the hopes that some agreement will come about is keeping the pound elevated. In EUR/GBP, the break below the 200-day moving average sees little in the way of a potential push back towards support @ 0.8865-66 again.
As for cable, the clear break above the December 2019 high has given the pair a new lease of life and from a technical perspective, there is little else in the way of a potential push towards 1.4000. The caveat as mentioned though, will be Brexit developments.