Pound whipsaws on Tusk comments on Brexit

Technical Analysis

Author: Justin Low | gbpusd

Cable spiked higher towards the 1.2500 level before plunging lower and is now moving back up again

GBP/USD M1 11-10
ForexLive
Cable moved to a high of 1.2505 just mere minutes before Tusk's comments hit the wires and this was the one which really triggered the algos and what not have you in my view:

"UK has not come forward with a realistic and workable proposal"
That saw cable move down to a low of 1.2409 (Bloomberg price, may be different depending on your broker) before spiking back up to 1.2460-70 levels and is now pushing the agenda towards the 1.2500 handle again.

So, what exactly does Tusk's remarks mean? In short, I don't think they mean much.

He's just merely trying to put pressure on Johnson to put forward a proposal before the European Council summit next week but even if Johnson comes up with one on deadline day itself, there's no way European leaders will ignore it.

GBP/USD D1 11-10
In the bigger picture for cable, price is now contending with key resistance from the 38.2 retracement level @ 1.2502. If buyers can hold a break above that, expect the pound to pick up further gains along the way as the tide looks to have shifted to favour buyers.

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