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Christopher Lewis
GBP/USD

The British pound has rallied significantly during the trading session on Monday, reaching towards the highs again, but at this juncture we have to worry about all things Brexit as per usual. The most recent headline was a rumor that perhaps they are working on some type of short-term agreement to extend the negotiations, but there has already been a little bit of pushback against that. Because of this, I do believe that it is going to be very difficult to break out above the 1.35 handle in the short term.

GBP/USD Video 24.11.20

This is not to say that I would be selling this pair, just that I do not think it has the momentum quite yet. The market is pricing in the idea of a Brexit agreement this week, and if it does not get it, the potential for the downside move gets aggressively strong at that point. If we do get some type of Brexit agreement, that is obviously good for the British pound, but one would have to think that quite a bit of that has already been priced in. This has been a difficult pair to trade for several years now. Because it moves on rumors and people trying to read the minds of politicians.

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With that being the case, you can expect quite a bit of choppiness and volatility going forward, and quite frankly I do not think that we have seen the last of the selling. However, the trend is clearly to the upside so there is no point in fighting it.

For a look at all of today’s economic events, check out our economic calendar.

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