GBP/USD rises to 7-week highs ahead of a crucial week

• The pound rose further during Friday’s US session.  
• Next Tuesday, the UK Parliament will vote on UK PM May Brexit deal.  

The GBP/USD pair rose late on Friday, extending gains on the back of a stronger pound that gained ground across the board. It rose ahead of a crucial week with unknown consequences in the UK.  

Cable broke above 1.2850 and rose to 1.2865, the highest level since November 23. Near the end of the week was hovering around 1.2850, consolidating a daily gain of a hundred pips.  

Earlier today the pound broke a 4-day trading range boosted after Conservative rebel Dominic Grieve urged UK PM Theresa May to delay Brexit if her deal is rejected at the Parliament. His comments pushed the pound higher, and it even rose further even after the government denied such plans.  

The GBP/USD pair is ending the week on a strong note ahead of a crucial week. On Tuesday will be the vote and the House of Commons is expected to vote it down. The result will likely trigger many speculations about Brexit itself and the future of the UK government.  

Data released today showed the UK economy expanded in November 0.2%. The number came in above expectations. In the three months to November activity rose 0.3%, down from 0.4%, the lowest in six months. “One factor that is likely contributing to sluggish growth is the U.K.’s approaching exit from the European Union and the associated uncertainty. A U.K. Parliamentary vote on PM May’s Brexit deal is scheduled next week, but is widely expected to be rejected. For the time being, slow U.K. growth and an uncertain outlook is likely to continue”, wrote Wells Fargo’s analysts.  

GBP/USD Outlook and levels  

From a technical perspective, Friday’s rally and the consolidation on top of 1.2800, sets the stage for a move higher. Also, the 20-day moving average turned to the upside, also supporting gains over the medium term. Taking into account the crucial week ahead, high volatility is expected, and moves are likely to be seen as unsustainable.