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  • GBP/USD witnessed a dramatic intraday turnaround from one-week lows.
  • The GBP gained traction after the UK signalled it won’t abandon Brexit talks.
  • A softer tone surrounding the USD remained supportive of the momentum.

The GBP/USD pair shot to fresh daily tops during the mid-European session, with bulls now looking to build on the momentum beyond the key 1.3000 psychological mark.

The pair stalled this week’s retracement slide from over one-month tops and witnessed some aggressive short-covering move on Wednesday after the UK signalled that it will not abandon Brexit talks immediately. According to reports, the UK will continue its efforts to reach an agreement with the European Union on their future relationship beyond Prime Minister Boris Johnson’s October 15 deadline.

The GBP/USD pair rallied around 140 pips from the 1.2865-60 region and was further supported by a softer tone surrounding the US dollar. As investors looked past a setback in the development of a COVID-19 vaccine, fading hopes of any further US fiscal stimulus and the US political uncertainty kept the USD bulls on the defensive through the first half of the trading action on Wednesday.

The GBP/USD pair has now recovered a part of the previous day’s negative move and remains at the mercy of the incoming Brexit-related headlines amid absent relevant economic releases from the UK. Hence, it will be prudent to wait for some strong follow-through buying before traders start positioning for the resumption of the recent positive momentum witnessed over the past two weeks or so.

Technical levels to watch