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