GBPUSD: Neutral -Prefer to buy dips

GBPUSD: 1.3215

Preferred Strategy: Sterling is back above 1.3200 on Friday, after a choppy session which saw a high of 1.3259 followed by a quick drop to the 1.3170 low, ahead of another recovery on hopes of a breakthrough on the Brexit negotiations, although the EU are putting pressure on UK PM May to come up with a more clearly defined plan before the EU Summit on Dec 14-15.

Overall, the momentum indicators are still in neutral so a cautious stance is required and it is wise to stand aside (although I remain long GbpAud). On balance, I still think Cable could grind higher in the days ahead although any negative Brexit headlines will see a rapid move to the downside, but for Monday, further choppy trade near current levels would not really surprise.

On the topside, resistance will again be seen at 1.3260, above which 1.3275/1.3300 would find good offers although I doubt we see it up here today.

On the downside, support will be now seen at 1.3170, 1.3150 and at 1.3135 ahead of the rising trend support low at 1.3100. I remain neutral, possibly very cautiously bullish. Note that the Autumn Budget Statement takes place on Wednesday.

Economic data highlights will include:      

M:

T: Public Sector Net Borrowing Requirements, Inflation Report Hearing, CBI Distributive Trade Survey – Orders

W: Autumn Budget Statement.

T: UK Q3 GD, Preliminary Total Business Investment (Q3)

F: