GBP is trading heavily - BBH

Sterling is trading heavily, after closing the North American session near its session highs and has slipped through yesterday's lows, which corresponded to a 50% retracement of sterling's bounce from $1.2775 last week to nearly $1.2980 this week, notes the analysis team at BBH.  

Key Quotes

“The next retracement level is seen near $1.2850.  As we recently suggested, the EU negotiators are not satisfied with the UK's effort on Brexit to date, and this makes the EU unlikely to signal that it is ready to discuss the post-Brexit relationship.  The UK government's reported hopes to pull an end run and appeal directly to Merkel and Macron is unlikely to prove successful.  It is far too early for the heads of state to overrule the EU's negotiating team.”

“The euro is in less than a half cent range.  It has extended its pullback for the third day but has stabilized around little-changed levels.  The euro has not recorded a three-day fall since early July.  There are two option strikes that are in play today.  There are 726 mln euros struck at $1.1875 and another 642 mln euros struck at $1.19 that expire today.  The $1.1865 area represents the 50% retracement of the latest leg up in the euro that we see beginning on August 17 near $1.1660.  The 61.8% retracement is near $1.1820.”