GBP/USD sits at multi-day tops, just below mid-1.2900s

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   •  The USD retreats further from YTD tops and helped regain positive traction.
   •  Brexit delay hopes further underpinning the GBP and remained supportive.

The GBP/USD pair finally broke out of its Asian/early European session consolidation phase and spiked to fresh multi-day tops, around the 1.2935-40 region in the last hour.

Having posted a session low level of 1.2892, the pair regained positive traction for the second straight session and built on Friday’s goodish up-move from one-month lows amid the ongoing US Dollar corrective slide.

In fact, the greenback retreated further from Friday’s fresh 2019 tops in wake of growing optimism over a possible resolution of US-China trade disputes and turned out to be one of the key factors driving the pair higher on Monday.

The British Pound was further supported by the UK Cabinet Office Minister David Lidington’s comments, saying that the UK government might be able to re-negotiate the deal or delay the Brexit term scheduled for March 29.

Meanwhile, the up-move seemed unaffected by the latest UK political development, wherein 7 Labour Party MPs confirmed their resignations and called themselves the Independent Group during a press conference in London.

The trading action, however, is likely to remain subdued and the pair might struggle to gain any follow-through traction in absence of any major market moving economic data in wake of the President’s day holiday in the US.

Moving ahead, market participants will keep a close eye on the UK Brexit Minister Steve Barclay’s meeting with the European Union chief Brexit negotiator Michel Barnier in a last minute attempt to re-negotiate the Brexit deal. 

Investors will also await the outcome of a meeting between the UK Prime Minister Theresa May and the European Commission President Juncker, which should provide some fresh directional impetus to the major. 

Technical outlook

Mario Blascak, FXStreet’s own European Chief Analyst writes: “While 1.2877 representing a 100-day moving average (DMA) should as a support line in the near-term, the GBP/USD is likely to target 1.2970-1.3000. On the downside, the 100-DMA at 1.2877 is short-term support with the break below likely to see 1.2830 level tested that represents a 50-DMA.”
 

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