The highly political pound does it again. UK PM confirmed that Brexit really does mean Brexit, setting a course for the UK to make a “clean” break from the EU, meaning a departure from single market membership and the customs union. That is the bottom line from her long-awaited, platitude -laden (Britain to be “truly global … profoundly internationalist” etc etc) keynote speech that is laying the government’s four principles and 12 negotiation priorities for Brexit. Among the highlights, May confirmed that the Brexit deal will be subject to parliamentary approval, which should not be too much of a surprise but has still gone down well in markets, sparking a rally in the pound, which has built on gains seen after hotter than expected UK inflation data earlier. Cable is presently up by 1.8% at six day highs above 1.2340, putting in some distance from yesterday’s three-month lows that were seen just less than 1.2000.
If the psychological 1.2300 holds then support would be found around 1.2270 and the 20 DMA and resistance around the January 5 & 6 highs at 1.2430.
/ has had a great start to 2017 with all four January trades achieving target 1 and target 2 for a total net gain of 904 pips.
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