GBP/USD hits fresh monthly tops, just above mid-1.3100s ahead of BoE inflation report hearings

   “¢   Receding fears of a no-deal Brexit continue to underpin the British Pound.
   “¢   A subdued USD price action remained supportive of the ongoing up-move.
   “¢   Traders now eye BoE’s quarterly inflation report hearings for some impetus.

The GBP/USD pair continued gaining positive traction through the early European session and spiked to fresh monthly tops, above mid-1.3100s in the last hour.

The pair built on Friday’s strong rally of over 100-pips and remained well bid for the third consecutive session on the back of the recent news flow, which eased fears of a no-deal Brexit, rather supported prospects for a softer/delayed Brexit.  

Against the backdrop of hopes that the UK PM Theresa May will delay the Brexit deadline, the overnight news that the UK Labour Party leader Jeremy Corbyn is ready to support a second referendum provided an additional boost to the British Pound.  

Adding to this, a subdued US Dollar price action, coupled with some follow-through technical buying on a sustained move beyond the 1.3100 handle remained supportive of the ongoing positive momentum to the highest level since January 31st.

Market participants now look forward to the BoE’s quarterly inflation report hearings, where comments by the BoE Governor Mark Carney and MPC members might trigger a fresh bout of volatility across the GBP pairs and produce some meaningful trading opportunities.

Later during the early North-American session, the release of Conference Board’s US consumer confidence index might also provide some impetus but is more likely to be overshadowed by the Fed Chair Jerome Powell’s semiannual testimony before Congress.  

Technical levels to watch

A follow-through buying has the potential to continue lifting the pair further towards reclaiming the 1.3200 handle en-route January monthly swing highs, around the 1.3215-20 region. On the flip side, the 1.3115-10 region now seems to protect the immediate downside, which if broken might accelerate the slide further towards 1.3035 horizontal support before the pair eventually drops to retest the very important 200-day SMA support near the key 1.30 psychological mark.