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  • Risk-on, Brexit optimism and post-US CPI led USD softness underpins.
  • All eyes on BOE Carney’s speech and US economic releases for fresh incentives.

The GBP/USD pair is looking to break the bullish consolidative mode to the upside and reach fresh six-week highs beyond the 1.31 handle, as the focus now shifts towards the BOE Governor Carney’s speech due later in the European session.

GBP/USD: US CPI miss adds legs to the rally

The spot catches fresh bids last hour and refreshes multi-week tops at 1.3122 levels, as the US dollar remains on the back foot across its main peers on the back of downbeat US CPI data and easing US-China trade worries.

Amid broad-based US dollar softness, Cable was left unaffected by the BOE’s status-quo and cautious stance, in the wake of looming Brexit uncertainty. The major was also buoyed by the renewed optimism around the Brexit deal, especially after the UK’s Brexit Secretary Raab noted that he is confident that the UK will get a good Brexit deal.

Meanwhile, the recent Bloomberg report that cited the EU would start redrafting the Irish Brexit protocol to appease the UK, also helped trigger the rally in the pound. Looking ahead, the pair will continue to track the broader market sentiment and USD dynamics ahead of Carney’s speech and key US economic releases, including the retail sales and prelim UoM consumer sentiment.

GBP/USD Technical Levels

“The pair is biased higher according to intraday technical readings, as in the 4 hours chart, an intraday retracement resulted in a sharp recovery once the price tested a bullish 20 SMA, currently at 1.3030. Technical indicators maintain their strong upward slopes well above their midlines, with the RSI nearing overbought readings. The pair still has room to extend its advance up to 1.3170, the 50% retracement of the 2016/18 rally. Support levels: 1.3085 1.3050 1.3010. Resistance levels: 1.3125 1.3170 1.3215,” FXStreet’s Chief Analyst Valeria Bednarik noted.

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