Technical Analysis

Sterling jumps on rumours of possible time limit to Irish backstop

Cable moved up from 1.3060 levels to a high of 1.3122


And price is now looking to hold above the 1.3100 handle with the near-term move also looking to hold a break above the key hourly moving averages. That would put the near-term bias in the pair to being more bullish.

I’m still a bit skeptical on the move from the headlines here as it is not coming from a European source but rather from the UK. I wouldn’t be surprised if we see some form of denial later or some remarks got lost in translation here.

In my view, it’s hard to imagine European leaders having such a massive shift in stance – perhaps Merkel but not the others – that they can come to an agreement to allow for a time-limited backstop to be put in place.

Unless there are some real alternatives and viable replacements to the backstop being paired together with the idea here, this is going to fall on deaf ears at the end of the day.

As for the pound, the lift here should be temporary but technically, price is looking to hold a break above the 1.3100 handle and key near-term levels in cable. That could stir further buying until the next relevant headline comes about.

Pretty much anything goes in this whole Brexit roller coaster at this point.

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