Confidence as UK agrees to continue BREXIT trade talks with the European Union (E.U.) – 21st October
We therefore noticed surge in Pounds pairs with the positive news and the Cable appreciated about 220pips today with other GBP pairs following suite.
One should note that this is an agreement to continue trade talks but doesn’t mean that there’s a Deal on the table yet. As we all know, things could very well change tomorrow and we could see the GBP plummet which has more or less being the NORM for a while now. Looking at the weekly Cable chart, you’ll notice that price has been sitting on the other side of the flipzone i.e. the Demand zone and as long as price remains above the zone, the Bulls will remain in charge until further notice.
On the hourly, price just broke out of a key resistance level 1.3020, which happens to be the highs of this week.
With the sudden burst of energy as a result of the positive news, we should expect some possible consolidation tomorrow and we look for further clues.
If you ask me, GBP is a no go area until next week as today’s move is a vertical (V-shaped) move and one shouldn’t fight the prevailing trend.