Sterling rises through 1.3400 on Brexit divorce bill agreement headlines
As expected, London traders got their teeth into the Brexit news that came out late last night. There was next to no appetite in Asia to push the pound further but as desks opened up in London, off we went through 1.3400, hitting a high of 1.3430. That high is the top level of a resistance area I’ve been watching for quite some time.
This 1.3400/30 area was one I would have been happy to short against at any other time but not on this news. It may well still mark a top either short-term or longer but this Brexit story might have much further to go and I’m expecting the quid to remain bullish for a while yet, unless we get more bomshell headlines that are negative. I still wouldn’t chase the top here but if 1.3430 goes, that could be a break to get on because there’s not much in the way to 1.3455/60 and then 1.3500. If traders are looking for a dip, the 1.3340/60 area looks prime for support. Closer to the price action, 1.3400 needs to hold up but 1.3380 is where better support is likely to be building. I remain long and I’m happy to hold but I’ll think carefully if 1.33 looks like being tested or broken.