GBP/USD: Bulls regain poise, 5-month tops near 1.3290 tested

• Picks up fresh bids on EU Barrier’s comments, Brexit delay hopes and fresh USD selling.
• Focus on UK Parliamentary meaningful vote on PM May’s Brexit deal, US data and Powell.

Following Tuesday’s over 1% rally, the GBP/USD  pair consolidated the upside almost throughout the Asian session near mid-1.31s before breaking higher to test five-month highs of 1.3289 in the early European trading.    At the press time, the spot trades +0.15% higher at 1.3271 levels.

GBP/USD: Technical set up points to further upside bias

The pair caught a fresh bid-wave at the European open following the comments from the European Union (EU) Chief Brexit Negotiator Barnier, as he said that the EU was doing all it can do reach a Brexit deal with the UK and avoid a disorderly Brexit.  

The overall sentiment around the pound remains underpinned by the increased odds of a delayed Brexit after the UK PM Theresa May offered her MPs an opportunity to vote for a no-deal Brexit and Brexit extension in case her initial proposal gets rejected on March 12^th.

Meanwhile, a fresh round of selling seen in the US dollar across its main peers also collaborated to the latest leg up in the spot. The European traders hit their desks and reacted negatively to the Fed Chair Powell’s testimony delivered on Tuesday by selling-off the buck broadly. Powell said that the Fed needs to be patient on the judgment on its monetary policy as the US growth remains solid, but is slowing.

“Looking forward, investors have fewer UK catalysts to observe during the rest of the day. British MPs are likely to vote on the PM May’s yesterday’s motion and opposition might propose the second referendum. However, these two events carry less importance considering yesterday’s outcome,” FXStreet’s own analyst Anil Panchal noted.

The focus also remains on the US macro news and day 2 of the Fed Chair Powell’s testimony due before the House Financial Services Committee, in Washington DC, later on Wednesday.

GBP/USD levels to watch