GBP/USD rallies to 1.3300 mark, highest since July 2018

   “¢   Hopes of delayed Brexit/second referendum continue to underpin GBP.
   “¢   The USD hangs near 3-week lows and remained supportive of the up-move.
   “¢   Market participants now look forward to Brexit motion debate/vote.

The buying interest around the British Pound picked up pace since the early European session and lifted the GBP/USD pair to the 1.3300 handle for the first time since July 2018.

A sudden change in the Brexit outlook, wherein the risk of a no-deal Brexit appears to have declined significantly this week, was seen as one of the key factors driving the pair higher for the fourth consecutive session.

A possible delay to the fast-approaching Brexit deadline on March 29 has been perceived as better than a no-deal outcome by the market participants, fueling expectations for a softer Brexit and underpinning the British Pound.

The sentiment remained bullish after the UK PM Theresa May confirmed on Tuesday that the parliament will have an opportunity to vote for a no-deal Brexit or Brexit extension if her revised Brexit deal again gets rejected on March 12.

The positive momentum got an additional boost after the EU’s Chief Brexit negotiator Michel Barnier said that the EU was doing all it can do to reach a Brexit deal with the UK and avoid a disorderly Brexit.  

Meanwhile, the prevalent US Dollar selling bias, with bulls failing to capitalize on the intraday attempted recovery, remained supportive of the pair’s ongoing strong bullish momentum to near eight-month tops.

It would now be interesting to see if bulls are able to maintain their dominant position amid highly overbought conditions on short-term charts and ahead of today’s Brexit motion debate and vote in the UK parliament.

Technical outlook

Mario Blascak, FXStreet’s own European Chief Analyst explains: “The technical oscillators including Momentum and the Relative strength index are pointing upwards and Slow Stochastics continues to move upwards within the Overbought territory. The most important technical feature though is the golden cross of the 50-day moving average crossing over the 100-day moving average (DMA).”  

“The golden cross is a strongly bullish technical signal that is expected to push Sterling to 1.3300 before testing the 1.3390 representing 61.8% Fibonacci retracement of post-Brexit recovery from 1.1800 top 1.4374,” he added further.