Global macro overview for 29/11/2017

The UK newspaper Telegraph revelations regarding the negotiators from the EU and the UK reached a preliminary agreement on the so-called "Brexit Divorce Bill". According to the newspaper, the parties have agreed on the amount of the settlement that London must pay to Brussels - EUR 60 billion. Although the sum is closer to the upper limit of the range that has been speculated for some time, the agreement is positive for the GBP as it opens the way to a breakthrough in negotiations on other levels during the December talk phase. The Irish border and the rights of EU citizens are yet to come to an agreement, but it seems that the next EU summit will be able to satisfy most of the block states. Although so far the UK government has denied the press release, it may only be a PR act against the British public (before the government finds favor with the progress of the negotiations, which will balance the high cost of the agreement). Naturally, it can not be forgotten that the negotiation process will take a long time and certainly will be painful for the UK. But at least in the short term, the climate around the negotiations should be positive enough to give the Pound sufficient support.

Let's now take a look at the GBP/USD technical picture at the H4 time frame. The market rallied after the news was published and the price has reached the 61% Fibo retracements of the previous swing down at the level of 1.3415. The zone between the levels of 1.3321 - 1.3338 will now act as a support for the price. Please notice a bearish divergence building between the price and momentum indicator.


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