The Pound soared against all of its major rivals on Wednesday supported by comments from EU’s Chief Negotiator Barnier, indicating that a Brexit deal is closer. The GBP/USD pair yesterday jumped to 1.3209 marking new high’s, after Barnier claimed that near the 85% of the Brexit deal has been agreed, although adding that they still need to agree on the Irish border issue. Barnier also commented that EU found many points of UK PM May’s Chequers plan in convergence with EU’s plans which greatly added support to British Pound’s momentum in broad market. Moving forward Brexit is expected to remain main driving force of British Pound as it has been so in recent past and this is clearly evident from positive performance of British Pound against US Greenback and other major global peers as the currency held its positive footing despite mixed macro data outcome.
US CPI Update Could Limit British Sterling’s Momentum in North American Market hours
As of writing this article, the GBPUSD pair is trading at 1.3220 after hitting a new intra-day and monthly high at 1.32441 which is considerably higher than yesterday’s high making it highest since September 26 th , 2018. One of key updates from Brexit proceedings which remains as main focus of investors is the fact that UK Prime Minister Theresa May is gearing up to try and swing a temporary trade agreement with the European Union following Brexit, at least until a firmer plan can be realized. Eurosceptics within PM May’s own government are already baying for blood, and calls are beginning to arise for the dissolution of May’s government, but bullish hopefuls are only focusing on the positives for the time being. It’s going to be a tense day on the economic calendar for the Cable, with an early speech from the Bank of England’s (BOE) Carney at 05:00 GMT, to be followed by the BOE’s Credit Conditions survey at 08:30 GMT, another appearance from Mark Carney at 09:00 GMT, and finally a speech from MPC Voting Member Vlieghe at 10:45 GMT.
After that will be the US’ CPI reading at 12:30 GMT and the outcome for CPI is expected to tick up from 2.2% to 2.3% which could serve as temporary breather for USD helping it halt the bullish momentum of Greenback’s major global peers. From technical standpoint, The short-term technical picture favors additional gains as the pair has broken above 1.3215 making it second stable support as the pair had found stable psychological support earlier this week at 1.3175 price handle. In the 4 hours chart, technical indicators maintain their upward slopes near overbought readings while the price advanced well above a firmly bullish 20 SMA. Expected support and resistance for the pair are at 1.3215, 1.3190, 1.3175 and 1.3245, 1.3290, 1.3325 respectively.
This article was originally posted on FX Empire
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