GBP/USD rises further on top of 1.2400 on USD weakness and Brexit headlines

• A moderate Brexit optimism boosts Pound across the board.  
• Greenback remains under pressure after another negative economic report.  

The Pound remains among the top performers on Thursday. Cable extended gains and rose to 1.2413, reaching the highest level in a week. As of writing, trades at 1.2400, posting a daily gain of a hundred pips, the best performance September 13.  

Another report points to US weakness  

The US Dollar tumbled after the release of data from the service sector. The ISM  Non-Manufacturing PMI dropped from 56.4 to 52.6 in September, significantly below market expectation of 55. The reading was a new negative surprise from US data after Tuesday’s ISM Manufacturing and Wednesday ADP for September (particularly the revision to August’s numbers). On Friday, more US data is due including the critical official employment report.

The DXY is falling sharply for the third day in-a-row. Following the latest reports tumbled to 98.68, a fresh weekly low and is down 0.35%. Two days ago it traded at the highest level in two years before starting a sharp reversal.  

Pound among top performers  

The improvement in expectations about a possible Brexit deal boosted the Pound across the board. The new Brexit proposal from UK Prime Minister Johnson received support from Tories who previously opposed a deal and also from the DUP.  

European Council President Tusk spoke with PM Johnson. He said that they remain open regarding Brexit but still unconvinced.  

Technical levels

Cable broke decisively above the 1.2330 resistance zone that now should act as a support. The rally also pushed the price above the 20-day moving average that stands at 1.2350. If GBP/USD extends gains resistance levels might be located at 1.2415 followed by 1.2435/40.