GBP/USD spiked higher overnight amid chatter on backstop concessions
Cable is a little lower on the day but is holding in a narrow range (19 pips) still. Buyers regained near-term control amid chatter on possible backstop concessions overnight.
That said, topside price action continues to be limited by a familiar near-term resistance level around 1.2075. That capped the overnight spike as well as any further push higher since then going into European trading today.
The risk for sellers now is if price chases a move above the 1.2075 level towards 1.2200. There are notable resistance levels around 1.2190-07 but a short squeeze has the potential to gather more momentum amid a break of those levels.
Johnson will be meeting with Merkel in Berlin later today before meeting up with Macron tomorrow. Let's see if there will be any more optimism to come from those meetings.
But as mentioned in my previous post, I'd be more comfortable selling into any further rallies than to chase one higher unless there is firm evidence of the backstop issue being resolved.
The risk for buyers today will be any further drop towards testing the 100-hour MA (red line) @ 1.2128. A break below that will see sellers regain more near-term momentum once again.
