Global macro overview for 30/08/2018

The market has found a lot of consolation in the words of the EU negotiator Barnier, in which he said the EU is ready to offer Britain a tailor-made partnership that cannot be boasted by any other country. At the same time, he stipulated that "the single market means the single market and this is beyond discussion". British Brexit secretary Raab added that the agreement is in sight. Well, the emotions are toned down by the German Foreign Minister, according to whom there will be no special treatment for Great Britain. Nevertheless, it looks like the balance of risks around GBP has changed. Barnier's words open up a range of possibilities to find points for rebound from a fatal GBP position. However, in order for this to happen, it would be necessary to learn more details about what a tailor-made solution can be.

GBP has the best day in seven months, which says a lot about the prevailing market sentiment. Previous reports related to Brexit were so negative that one optimistic comment of the EU Barnier negotiator was enough for GBP / USD to launch more than 1.0%. The pair has broken out of the channel, and unwinding pessimism can give grounds for a further rally. However, there are heavy obstacles on the road. The zone between the levels of 1.3050 - 1.3065 combines the upper limit of the short-term growth channel, 23.6% of the Fibonacci retracement measured from the highs at 1.4375 and the 55-day moving average. Nevertheless, today's drop was shallow (down to 1.2990), which suggests that the market is gathering for further gains, but is waiting for an impulse. After the possible breakout, the next target for bulls is the resistance from July 31 located at the level of 1.3170.


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