Cable climbs to four-week high, closes in on 1.30 handle

Technical Analysis

Author: Justin Low | gbpusd

The march higher continues for the pound

GBP/USD 18-11
Buyers are testing a move above the 31 October high of 1.2976 as price touches a high of 1.2985 on the day, the highest level since 22 October. It's starting to look like a question of whether or not the 1.3000 handle can hold on if this keeps up.

The figure level has helped to stall the upside move seen last month but with election sentiment favouring Boris Johnson's Conservatives, traders are starting to feel more optimistic about reaching a possible Brexit end-game next year.

There's still a lot of things to consider after the election but baby steps I guess. For now, there is at least some sense of a 'feel good' factor - or at least the market seems to think so - in the pound after months of uncertainty.

All that being said, agreeing a Brexit deal is just the first step towards transitioning towards something "better" for the UK and the pound. The next step will be negotiating a future trade relationship and that comes with risks for the pound in 2020.

As highlighted here last month, a no-deal Brexit is also still not off the table and what more the fact that negotiations could take several years to play out.

I don't think pound traders have grasped the idea of those issues for the time being. But it will come about sooner rather than later surely.

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