GBPUSD: Neutral

GBPUSD: 1.2774

Cable traded a modest 54 pip range on Friday (1.2760-1.2806), ignoring the moves seen elsewhere while waiting for the Brexit talks to get under way this week (Monday 11.00 am UK time). The UK chancellor has said that he is open to ideas from Brussels and will try to find a solution that works for both the UK and EU. He indicated that he will prioritise the economy and jobs in remarks that will be seen as a clear signal of his desire for a soft Brexit, which may well underpin Sterling as we head through the week, as long as a hard Brexit looks to be a less likely outcome..

Technically, the outlook remains much the same as before, with the topside likely to see sellers heading into the 1.2800/17 area, which capped it last week, but above which could then head on to 1.2840 and then eventually on towards 1.2900.

Below Friday’s low, of 1.2750, the initial support is at 1.2690/1.2700. Below there could see a run back to the recent lows at around 1.2636/40 although the momentum indicators are generally neutral and a choppy 15 June, close to current levels, would not surprise. Further out, below the 100 DMA, further support would arrive at 1.2600 and then at 1.2575 and 1.2514, which was the low seen on the announcement of the election in April. Below that would head towards 1.2465/70 although that remains some way off.

Economic data highlights will include:

M: Brexit Negotiations Commence

T:

W: Public Sector Net Borrowing Requirements (May)

T: CBI Distributive Trade Survey – Orders

F: CBI Distributive Trade Survey – Realised

Interested in GBPUSD technicals? Check out the key levels