GBP / USD updates session highs, looking to build momentum above 1.3000

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  • GBP / USD witnessed a dramatic intraday reversal from the one-week lows.
  • The British pound gained traction after the UK signaled that it will not abandon Brexit talks.
  • A softer tone surrounding the USD continued to support the momentum.

The pair GBP/USD spiked to fresh daily highs during the mid-Europe session, and the bulls are now looking to capitalize on momentum above the key psychological mark of 1.3000.

The pair halted this week’s retracement slide from the highs of more than a month and witnessed an aggressive short-hedging move on Wednesday after the UK signaled that it would not abandon Brexit negotiations immediately. The UK will reportedly continue its efforts to reach an agreement with the European Union on their future relationship beyond Prime Minister Boris Johnson’s October 15 deadline.

GBP / USD rallied around 140 pips from the 1.2865-60 region and was supported by a softer tone around the US dollar. As investors looked past a setback in the development of a COVID-19 vaccine, dashed hopes of any new US fiscal stimulus and US political uncertainty kept USD bulls on the loose. defensive during the first half of trading action on Wednesday.

The GBP / USD pair has now partly recovered from the negative move of the previous day and remains at the mercy of incoming Brexit-related headlines amid the absence of relevant UK economic releases. Therefore, it will be prudent to wait for some solid follow-up buying before traders start to position themselves for the resumption of the recent positive momentum seen over the last two weeks or so.

Technical levels

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Credits: Forex Street

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