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  • Writer's pictureMike Paterson

Pound tumbles amid Brexit deal concerns

Monday 7 December 2020

I've been warning for a long while now that Brexit remained the large elephant in the room and after Friday's rally on some, seemingly now over-optimistic, news we've seen a solid GBP tumble this morning as renewed fears for a deal emerge once again.

Throw in some some softer risk sentiment generally as equities and oil wobble again and it's been a lively start to the week overall, with the positive vaccine vibes taking a back seat again for the moment.

A busy and crucial few days ahead not only with Brexit talks but also the latest ECB monetary policy decision/rhetoric this Thursday.

GBPUSD posted highs of 1.3539 on Friday but since back down this morning to 1.3230 as I type as the Pound selling extends on the negative Brexit news and softer risk bringing fresh GBPJPY sellers to the party too. EURGBP up through 0.9100 again also helping to push GBPUSD lower. EURGBP held 0.8980 on Friday as GBP rallied but now up testing 0.9130 as I type after a sharp rally through the previous highs around 0.9060. I remain a dip buyer overall but still respecting the Brexit-led volatility.GBPJPY capped at 140.60 and now pushing through 138.00 amid the softer GBP and risk sentiment.

I stay poised to sell GBP rallies as my preferred side and buy back in the dips as ever.Patience continues to be a virtue and rally-selling in GBPUSD is still bringing some reward but entry level key as always. Definitely still expecting some dip demand amid all the volatility as I've warned for a while now. Brexit still the large elephant in the room.

USDJPY held the 103.80 support area on Friday, then 104.00 in Asia and now pushing higher on some general USD demand but tempered by JPY risk-off demand. EURJPY is finding has some solid support around 126.00 again as I type after failing above 126.60. EURUSD finally ran out of puff and capped at 1.2175-80 and now testing 1.2080 as I type. USDCHF once again bore the brunt of the EURUSD rally but held 0.8880 with EURCHF underpinned and the SNB still ever watchful.

AUDUSD capped into 0.7450 again and now down at 0.7380 helped by firmer USD tones and some AUDJPY risk-off selling.USDCAD failed at 1.2870 this time around and tested 1.2775-80 on the retreat but noew rallying amid some USD demand and softer risk CADJPY supply.

Markets are ever-fickle so don't forget to contact me if there's areas that you might need some further help with.

Let's continue to be careful out there in all things. Staying safe must be our main priority still. Have a good week.

Interbank rates: 09.28 GMT

GBPUSD 1.3245

EURUSD 1.2088

EURGBP 0.9127

GBPEUR 1.0967

GBPAUD 1.7940

GBPCAD 1.6978

GBPJPY 138.12

GBPZAR 20.2243

GBPHKD 10.2572

USDJPY 104.28

USDZAR 15.2503

EURJPY 126.06

EURCHF 1.0804

EURHKD 9.3528

AUDUSD 0.7383

USDCAD 1.2822

USDCHF 0.8936

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