GBPUSD spikes higher on hopeful Brexit discussion headlines

Technical Analysis

Author: Greg Michalowski | gbpusd

EU/UK negotiators made progress this week toward resolving big disagreements in Brexit talks

The GBPUSD spike higher on headlines saying:
  • EU/UK negotiators made progress this week toward resolving some a big disagreements in Brexit talks raising hopes for a deal by early November
The GBPUSD shot higher to a high of 1.3009. That that the price above swing lows from October 26 and October 27 between 1.2992 and 1.3000. However, the spike was short-lived. The prices since moved back down and is trading at 1.29623 as I type.

Looking at the hourly chart, the low for the day prior to the run higher reached 1.29159 that was just above the swing low from October 20 at 1.2910. Traders leaned against that low rewarded on the headline news.

EU/UK negotiators made progress this week toward resolving big disagreements in Brexit talks
What now?

For one, the headline news in the GBP pairs can come from a number of different directions. There is Covid. There is the flows from stocks and there is also Brexit.  That can make trading particularly volatile as we just witnessed.  

Technically, the 200 hour moving average (green line) is near the 50% retracement of the range since October 16 and at 1.3017 area. Ahead of that is the swing area between 1.29921 and 1.3000. Stay below tilt the bias more to the downside.  

On the downward extreme we know the 1.2910 area is a support level that the market leaned against earlier. Below that and traders will be looking toward the 100 day moving average at 1.28644 ahead of the October 16 low at 1.28554.

In between the 61.8% retracement 1.29779 may be a barometer that gives traders some comfort. The swing high from October 20 came near that level as well
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