GBP/USD spikes to 2-week tops, further beyond 1.2300 mark

• GBP/USD caught some aggressive bids on Tuesday amid a broad-based USD weakness.
• The sterling got an additional boost from some positive Brexit-related headlines.
• Technical buying above 50-day SMA further contributed to the strong momentum.

The GBP/USD pair gained some strong positive traction since the early European session and rallied to near two-week tops, levels beyond the 1.2300 round-figure mark.

Following a subdued/range-bound trading action through the early part of Tuesday’s trading action, the pair caught some aggressive bids and broke through the 50-day SMA hurdle near the 1.2265-70 region. The strong intraday positive move was fueled by some aggressive US dollar selling.

Hopes for a global economic recovery from the coronavirus pandemic, coupled with the latest optimism over a potential COVID-19 vaccine boosted investors’ confidence. This, in turn, led to a strong risk-on rally and dented the greenback’s relative safe-haven status against its British counterpart.

The sterling got an additional boost from reports that the EU is willing to drop its ‘maximalist’ approach on fisheries in negotiations with the UK next week. This marked mark the first major concession from the bloc and helped ease concerns about a deadlock in Brexit talks.

The momentum took along some short-term trading stops placed near the 50-day SMA, which further contributed to the pair’s sudden spike over the past hour or so. The GBP/USD pair climbed to its highest level since May 13 and took a brief paused near the 1.2325-35 intermediate resistance.

Moving ahead, market participants now look forward to the US economic docket – highlighting the release of the Conference Board’s Consumer Confidence Index. The data might influence the USD price dynamics and produce some short-term trading opportunities during the early North American session.

Technical levels to watch