GBP/USD hits fresh 5-month highs above 1.3280

• Pound resumes rally across the board and extends gains after a brief pause.  
• A decline of the US dollar adds fuel to GBP/USD.  

The GBP/USD pair bounced back to the upside around the 1.3150 area and gained more than a hundred pips, rising on top of 1.3250. Cable reached a fresh 5-month high at 1.3283, and it was holding near the top, with the bullish tone intact.  

The pound continued with the rally that started last Friday after today’s Brexit developments. Fewer concerns about a no-deal Brexit contributed to boosting the currency. Also, expectations that the Labour Party will bring a second referendum to the table as soon as tomorrow helped the mood around the pound.  

Today UK PM May said she has not been discussing Brexit delay with European Union officials. She offered a timetable. The new meaningful vote will be on March 12, if it fails the next day there will be a vote on a no-deal; it if fails, a new vote March 14 will take place on extending Article 50.  

Another positive for the pound was today’s BoE Inflation report hearings. Carney was not pessimistic about the future and mentioned that they do not see any liquidity stresses in the market.

In the US, economic data date came in mixed. On the negative side, housing starts collapsed in December while consumer confidence improved in February. Fed’s Chair Powell is at the Congress, at the presentation of the semi-annual monetary policy report. He mentioned economic conditions remain healthy and presented a favorable outlook with some crosscurrents. So far, the presentation  had a limited impact on the currency market, amid a lack of new information from the Fed.  

As of writing, GBP/USD was at 1.3250/60 holding a bullish tone and on its way to the highest close since July 5, supported by a stronger pound and also by a move lower of the greenback. Price was moving toward the 1.3300 area. Since June of last year, cable has been unable to hold firm on top of the mentioned zone.  

More Levels