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GBP / USD is holding above 1.31

The GBP / USD pair is correcting downward on Thursday, after rising by more than 1.3% the day before. Investors have fixed some long positions after renewing 6-week highs.

 

According to some experts, Bloomberg reports that Brexit negotiations should be resumed in the near future, after the UK announced their suspension on Monday, became the driver for the rapid growth of the British currency. Brexit negotiations are due to resume after a sudden stop last week. According to Bloomberg, the parties aim to conclude an agreement by mid-November.

 

Also on Wednesday, the EU's chief negotiator Michel Barnier said that despite the difficulties in negotiations, the conclusion of an agreement by the end of the year is still possible.

 

Today the market situation has changed somewhat. Speculative demand for the British currency dropped sharply. Additional pressure on the GBP / USD pair is exerted by the American dollar, the index of which has strengthened by more than 0.15% since the beginning of the day.

 

The fundamental background for the British currency remains negative. There is no real progress in trade negotiations. Over the past 9 months, the parties have repeatedly expressed their hopes and desires to conclude an agreement, but by the end of October, no agreement was reached. According to the Financial Times, today the head of the Central Bank of Ireland announced a change in the baseline scenario for Brexit. Now it includes Britain's withdrawal from the EU without an agreement.

 

In the economic calendar today it is worth paying attention to the speech of the head of the Bank of England, Andrew Bailey.

 

The main influence on trading will be provided by the news on the trade negotiations between the UK and the EU.

 

On the chart, the price tested resistance at 1.3150 which is a very strong level. Until the bulls can pass it, the basic scenario is the development of a correctional movement to 1.3040.

 

  • Resistance levels: 1.3150, 1.3255, 1.3350;

 

  • Support levels: 1.3040, 1.2920, 1.2845.

 

The main scenario - a decline to 1.3040.

 

An alternative option - a breakdown of resistance at 1.3150 and growth in the direction of 1.3255.

 

The current fundamental outlook is moderately negative. We consider shorts from the level of 1.3150.

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