GBP/USD rallies to fresh session tops, closer to 1.2700 handle
• Hunt’s positive Brexit comments prompt some aggressive short-covering move.
• Persistent USD selling bias remained supportive of the strong intraday up-move.
The GBP/USD pair quickly reversed a mid-European session dip to an intraday low level of 1.2635 and rallied over 50-pips in the last hour.
The latest leg of sudden spike followed positive comments by the UK Foreign Minister Jeremy Hunt, saying that the UK PM Theresa May’s Brexit deal can be passed by the parliament if the European Union provides clarification that the Northern Irish “backstop” will be time-limited.
The comments boosted the British Pound and prompted some short-covering move, lifting the pair back closer to the 1.2700 handle, though news that the UK all-party International Trade Committee is calling for a "meaningful vote" on all trade agreements kept a lid on any strong follow-through.
Meanwhile, the up-move remained supported by persistent selling pressure surrounding the US Dollar, which continues to be weighed down by fears that global economic slowdown might spill over into the US and the partial US government shutdown.
It, however, remains to be seen if bulls are able to maintain their dominant position or the up-move runs out of steam at higher levels as traders are likely to keep positions rather light amid thin liquidity conditions ahead of the year-end holidays.
Moving ahead, today's US economic docket, featuring the release of Chicago PMI and pending home sales data, will now be looked upon for some short-term momentum on the last trading day of the week.
Technical levels to watch
Today Last Price: 1.2685
Today Daily change: 31 pips
Today Daily change %: 0.245%
Today Daily Open: 1.2654
Previous Daily SMA20: 1.2663
Previous Daily SMA50: 1.28
Previous Daily SMA100: 1.29
Previous Daily SMA200: 1.3199
Previous Daily High: 1.2676
Previous Daily Low: 1.2616
Previous Weekly High: 1.2708
Previous Weekly Low: 1.2574
Previous Monthly High: 1.3176
Previous Monthly Low: 1.2723
Previous Daily Fibonacci 38.2%: 1.2653
Previous Daily Fibonacci 61.8%: 1.2639
Previous Daily Pivot Point S1: 1.2622
Previous Daily Pivot Point S2: 1.2589
Previous Daily Pivot Point S3: 1.2562
Previous Daily Pivot Point R1: 1.2681
Previous Daily Pivot Point R2: 1.2708
Previous Daily Pivot Point R3: 1.274