GBPUSD – Test of 1.3600 Coming?

GBPUSD – Test of 1.3600 Coming?

Cable popped in late London trade on reports from the Independent that EU and UK have agreed to a Brexit divorce bill. While no details were given, the news if confirmed is the first bright spot in Brexit negotiations for PM Theresa May and suggests that two parties may be finally reaching some key compromises on the issues.

Still, Brexit talks face an uphill test, especially given the key negotiating deadline of December 4th next week, and unless UK can offer palatable solutions on both the Northern Ireland border issue and on freedom of movement concerns, today enthusiasm may evaporate and GBPUSD could tumble towards 1.3000 once again.

On the other hand, if this is the first step to a serious Brexit agreement, the upsurge in cable could continue unabated for much longer than anyone imagines and the pair could challenge 1.3600 before year end.

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