GBP/USD consolidates strong daily gains, eyes 1.2800 on Brexit deal hopes

• Hopes about a Brexit deal boost Sterling across the board during the American session.  
• Cable heads for highest daily close in five months.  

The GBP/USD pair jumped from 1.2640 to 1.2797, reaching the highest level since mid-May. From the top, the pair pulled back but managed to hold on top of 1.2700. Near the end of the session, it stands at 1.2780, up almost 600 pips from the level it had a week ago. The 1.2800 zone is now the resistance to break for the pair, while 1.2750 and 1.2710 have become short-term support levels.  

Upside resumes, again on Brexit  

Hopes about a Brexit with a deal continue to support the Pound. A report even mentioned that a draft was ready. EU officials pulled expectations down but did not deny that there appears to be an agreement regarding the Irish border. The Pound jumped in the markets, resuming the upside following a consolidation period on Monday.  

Regarding economic data, in the UK, the labour market report came in below expectations, with the unemployment rate rising to 3.9%. Economic numbers have no significant impact offset by Brexit developments. On Wednesday, inflation data in the UK and retail sales numbers in the US are due. Also, traders will continue to look for US-China trade talks headlines.