• The pound rose on Monday as the dollar weakened, following a surprise downgrade of the U.S. government's credit rating.
• Moody’s downgraded the U.S. top sovereign credit rating by one notch on Friday, citing concerns over the nation’s ballooning $36 trillion debt.
• The news pushed the dollar lower against major currencies, ending a four-week winning streak fueled by trade optimism and easing U.S.-China tensions that had calmed recession fears.
• Meanwhile, ahead of Monday’s EU-UK summit, the European Union and Britain reached a tentative agreement on defense, security, fisheries, and youth mobility, allowing British firms to compete for major EU defense contracts.
•Britain is set to agree on the most significant reset of relations with the European Union since Brexit, aiming for closer cooperation on trade and defense to strengthen the economy and enhance continental security.
• Immediate resistance is located at 1.3406(38.2%fib), any close above will push the pair towards 1.3462(higher BB)
• Strong support is seen at 1.3250 (50%fib) and break below could take the pair towards 1.3163 (Lower BB).
Recommendation: Good to buy around 1.3380, with stop loss of 1.3250, and target price of 1.3500
