The pound rises on fresh demand in the European morning
And that has seen cable buyers attempt another test of the 200-hour MA (blue line), an area which was rejected in overnight trading following May’s loss in the meaningful vote. Move above that level and near-term bias turns more bullish instead.
As it stands, sentiment remains that we’re headed for a Brexit extension while markets are anticipating that it will lead to either a second referendum or some form of revised Brexit deal – whether or not it be from May or another section of the government.
I reckon those hopes are what is fueling upside pressure for the pound in the early morning but once again, it must be noted that we still have the no-deal Brexit vote later and there’s also the risk that the European Union may not grant an extension; though the risks associated to both are still rather minuscule.
For cable, if price breaks above the 200-hour MA, we could see a move towards challenging the 1.3200 handle next and then the high closer to 1.3240 and 1.3280-85 next.