The GBP/USD pair faded a knee-jerk bullish spike to fresh multi-month tops and quickly retreated nearly 150 pips in the last hour.
The British Pound rallied across the board in reaction to the news, confirmed by the UK Prime Minister Boris Johnson and the President of the European Commission Jean-Claude Juncker that a Brexit deal has been reached. The pair skyrocketed to the highest level since May 13, albeit the intraday upsurge faltered just ahead of the key 130.00 psychological mark.
However, the fact that the DUP reiterated its stance and expressed its discontent on several points in the Brexit deal raised uncertainty on whether it will support Johnson’s deal in Parliament at Saturday’s special session, which eventually turned out to be the only factor that kept a lid on any subsequent up-move for the major.
The pair has now retreated to the pre-announcement levels, just above mid-1.2800s, below which the corrective slide could further get extended back towards the 1.2800 round-figure mark. Failure to defend the mentioned handle might turn the pair vulnerable to retest daily swing lows, around mid-1.2700s.
On the upside, the 1.2900 handle now seems to act as an immediate resistance, which if cleared decisively might assist the pair to make a fresh attempt towards reclaiming the 130.00 round-figure mark. Sustained strength beyond the daily swing high might be seen as a fresh trigger for bullish traders and pave the way for a further near-term appreciating move.
The pair then could climb towards the 1.3065-70 intermediate resistance en-route the 1.3100 handle and late April swing highs near the 1.3175 region.
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