GBP/USD spikes to fresh session tops, around 1.2970 level

   “¢   The GBP remains supported by Carney’s more upbeat comments on Thursday.
   “¢   A subdued USD price action near two-week tops prompts some short-covering.

The GBP/USD pair quickly reversed a dip to an intraday low level of 1.2921 and rallied nearly 50-pips in the last hour, now eyeing a move towards the overnight swing high.

The British Pound remained supported by Thursday’s more upbeat comments by the BoE Governor Mark Carney, saying that markets should not prepare for a scenario of a rate cut and (or) no further rate hikes.  

Meanwhile, the US Dollar failed to capitalize on the recent rally and witnessed a subdued action, albeit held steady, near two-week highs, which could be one of the other factors extending some support to the major.  

The latest leg of a sudden pickup over the past couple of hours lacked any obvious fundamental catalyst and could be attributed to some follow-through short-covering on a sustained move back above mid-1.2900s.

Against the backdrop of the uncertainty surrounding Brexit, market participants expect volatility to remain elevated in the near-term and hence, it would now be interesting to see if the pair is able to reclaim the critical 1.30 handle.

Technical levels to watch