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British Pound (GBP) Latest: EU/UK Trade Talks Resume, GBP/USD Hints at a Positive Breakout

British Pound (GBP) Latest: EU/UK Trade Talks Resume, GBP/USD Hints at a Positive Breakout

Nick Cawley, Strategist

GBP/USD Price, Chart and Analysis:

  • EU/UK talks reconvene in Brussels on Tuesday.
  • GBP/USD continues to make a bullish pennant formation.

The latest round of EU/UK trade talks in Brussels this week – starting on Tuesday – may well see the two sides coming closer together with recent talk suggesting that compromises may have been found on both the role of the European Court of Justice and the two sides future relationship. While nothing has been announced, last week Ireland’s Taoiseach Micheal Martin hinted at that a ‘landing zone’ has been found between the two sides, the first positive statement in many months of negotiations.

The latest UK inflation data will be released on Wednesday, with the core rate expected to tick down by 0.1% to 1.3%, while on Friday the latest Markit/CIPS PMI readings for August will be closely watched. For all market-moving data releases and events see the DailyFX Economic Calendar

GBP/USD continues to push higher, aided by a weak US dollar and positive Sterling sentiment. Last week I suggested that a bullish pennant pattern was being formed, and this continues to be the case and should be monitored for a potential upside breakout as GBPUSD gets closer to the apex of the formation. A break and open above the 1.3188 level made on August 6 opens the way to the early March high at 1.3200 and beyond with the December 11 high at 1.3520 a likely target. To the downside, the 1.2980 – 1.3000 area should hold any short-term sell-off.

Pennant Patterns – Trading Bullish and Bearish Pennants

GBP/USD Daily Price Chart (December 2019 – August 17, 2020)

British Pound (GBP) Latest: EU/UK Trade Talks Resume, GBP/USD Hints at a Positive Breakout

Traders of all levels and abilities will find something to help them make more informed decisions in the new and improved DailyFX Trading Education Centre

What is your view on Sterling – bullish or bearish?? You can let us know via the form at the end of this piece or you can contact the author via Twitter @nickcawley1.

DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.

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