The GBP / USD pair is correcting downward on Thursday after yesterday's growth. Investors are partially fixing long positions on the British currency before the meeting of the leaders of the EU countries, at which the Brexit issue will be the main topic of discussion. But the market is now dominated by optimistic sentiment, so the GBP / USD pair retains good chances of resuming its upward movement.
According to experts, the likelihood of Britain leaving the EU without an agreement dropped to 20-25%. Previously, this probability was estimated at 40-50%. The market expects the parties to successfully complete negotiations and conclude a trade agreement in the coming months. This could lead to a sharp short-term rise in the British currency to 1.35.
Today the market will focus on news related to the meeting of the leaders of the EU countries. It’s important to note that the meeting will last for two days, today and tomorrow.
Also, the fall forecast of the budget from the UK Treasury in the House of Commons may have an impact on the British currency.
On the chart, buyers could not immediately gain a foothold above 1.3030. However, the price is holding above the local support at 1.2985. We expect the upward movement to resume from this level and the local maximum update at 1.3080.
The main scenario - growth from current levels to 1.3080.
An alternative scenario - a breakdown of the support at 1.2985 and a decline to 1.2920.
The current fundamental outlook is neutral. We consider longs from the level 1.2985.
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