Brexit
The GBP/USD pair surged higher after the Times Radio reported that the UK and the EU’s trade talks have entered “the mythical tunnel.” Reuters is also quoting the Times Radio on this, with the GBPUSD climbing 56 pips, or nearly half a percent, within a 5-minute time frame. Details were still sketchy at the time of writing.
“Entering the tunnel” is a phrase coined by the EU trade negotiators to refer to the intensification of negotiations between smaller teams from both sides (EU and UK). These “tunnel” talks are protected from potential leaks and media scrutiny. They typically involve the most senior negotiators and stripped of anything that could distract from the end-goals.
Today’s surge found support on the 1.33193 price level on the daily chart. This surge has put the upper boundary of the ascending channel at risk. A break of this landmark opens the door for a potential price move towards 3-month highs at 1.34765. Above this level, the GBPUSD steps into 2020 highs and targets the 13 December 2019 high at 1.35143. 1.36117 remains in the picture as a potential upside target.
On the other hand, 1.33193 must give way for downside targets at 1.32663 and 1.31754 to come into the picture. Only a decline below the channel allows 1.30554 and 1.29469 to become relevant to the price picture.
