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Major currencies are little changed for the most part as the same old themes from last week continue to play out. The dollar remains in a vulnerable spot, as the slight pullback yesterday fizzled towards the latter stages of the day.
Instead, the pound is stealing the spotlight right now as Brexit talks reach a crucial point ahead of the now Wednesday “deadline”. The pound fell by quite a bit before recovering some poise into the closing stages yesterday as hopes for a deal stay alive.
The late cable rebound met resistance from the 100-hour moving average and 1.3400 level, and that is keeping gains in-check ahead of European trading today.
EUR/GBP failed to post a close above 0.9100 but buyers are still staying in the game, holding above the respective 100-hour moving average @ 0.9046 and the 100-day moving average @ 0.9034 – for now at least.
The market looks very much like it is in need of a bit of a breather after the monstrous rally since November. That might be fitting considering it’s year-end and there might be a need for some position rebalancing and also dollar funding needs.
However, there is still little to suggest that the narrative in the big picture will change so that could make for more opportunities when looking out to the new year especially.