“¢ The USD remained heavily offered on the back of a split Congress.
“¢ Fresh Brexit optimism further fuels the ongoing bullish momentum.
“¢ Trump’s upcoming press conference eyed for some fresh impetus.
The greenback selling pressure remained unabated through the mid-European session, pushing the GBP/USD pair to fresh three-week tops in the last hour.
The results of the US midterm elections was seen weighing heavily on the US Dollar and turned out to be one of the key factors behind the pair’s strong upsurge to an intraday high level of 1.3175. The official results showed that the Democrats secured the needed 218 seats to gain control of the US House of Representatives, while the Republicans maintained their majority in the Senate.
A split Congress fueled speculations that any major US fiscal policy boot to the economy is unlikely for now, which was eventually seen exerting some heavy downward pressure on the buck and remained supportive of the pair’s strong intraday positive momentum.
Meanwhile, the British Pound got an additional boost from fresh Brexit optimism, following some positive comments by the Irish PM Leo Varadkar, who was quoted saying that the Brexit talks are in the final few weeks and it is possible to reach an agreement on Brexit in November.
Bullish traders now seemed taking some breather, with the pair quickly retreating around 20-pips from session tops, as focus shifts to the US President Donald Trump’s upcoming news conference, scheduled at 1630 GMT – 1130 local time in Washington.
Technical levels to watch
Any further slide now seems to find support near the 1.3125 region and is closely followed by the 1.3100 handle, which if broken might prompt some aggressive long-unwinding trade and drag the pair further towards the 1.3060-55 region. On the flip side, momentum above the 1.3175 level (session tops) now seems to lift the pair further beyond the 1.3200 handle towards testing its next major hurdle near the 1.3220-25 region.
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