The rates continue within the uptrend, in favor of the GBP. In August the highest level in 6 months was reached amid optimism about a deal with the EU. As it became known recently, the parties are close to a deal, and the Bexit agreement is expected to be signed in September. At the same time, a new round of negotiations has already begun this week. The EU summit, which started today, may also have an impact on the pound, as details of Brexit may be discussed there.
Today, the pound was under pressure due to the second wave of the pandemic, which increased the demand for safe assets. in particular, a number of EU countries are already planning to tighten the quarantine, which may lead to pressure on businesses in the region. in addition, the yen received support by the publication of the trade balance, which unexpectedly turned out to be positive for investors in July, and the pace of decline in imports and exports was less than expected.
Despite finding the rates at a 6-month peak, the pound still has some potential for growth in the medium term, in the event of a trade deal, and this probability is very high at the moment. Most technical analysis tools also indicate the continuation of the trend and efficiency of the deals to BUY.
