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The pair was unable to capitalize on the rally and faced heavy selling near the 1.2960 area in response to UK Prime Minister Boris Johnson’s comments regarding Brexit. Johnson said he would seek a no-deal Brexit unless there is a fundamental change in the EU approach.
Johnson’s comments led to a 100-pips drop in the pound against the US dollar. Johnson also made it clear that he was not withdrawing from the negotiations and this helped somewhat in limiting deeper losses.
In any case, fears of a sharp rise in Corona cases, renewal of closure measures and impeding the global economic recovery, which led to an increase in support for the US dollar, this could help to stop the rapid rise of the pair, at least for the time being.
Markets will be awaiting monthly US retail sales, industrial production data and the preliminary estimate of the Michigan Consumer Confidence Index for October.
