- Bulls continue to show some resilience ahead of the 1.2100 handle.
- A modest USD pullback contributed to the intraday positive move.
- Brexit-related uncertainties kept a lid on any strong follow-through.
The buying interest around the British Pound picked up the pace in the last hour, with the GBP/USD pair surging through the 1.2200 handle to hit over three-week tops.
Bulls shrug off the incoming Brexit headlines
The pair once again managed to find decent support just ahead of the 1.2100 handle and rallied over 70-pips intraday, rather unaffected by persistent uncertainty about Britain’s exit from the European Union (EU). Ahead of his meeting with French President Emmanuel Macron, the UK PM Boris Johnson repeated that they must leave the EU on October 31 with or without a deal.
Adding to this, Macron emphasized that the backstop is indispensable and also said that there will be no new Brexit withdrawal agreement within 30 days. Macron further added that a no-deal scenario was not the EU’s choice, but they must be ready for it. The comments reflected diverging stances, though did little to influence bearish traders or prompt toms fresh selling.
On the other hand, the US Dollar failed to capitalize on the overnight up-move – supported by not so dovish July FOMC meeting minute – and further collaborated to the pair’s intraday bullish move. The positive momentum, however, once again faltered ahead of the 1.2200 handle, with the pair quickly retreating around 25-30 pips to currently trade around mid-1.2100s.
Moving ahead, Thursday US economic docket – featuring the release of flash manufacturing and services PMI – will now be looked upon for some short-term trading opportunities amid the incoming Brexit-related headlines and ahead of Jackson Hole Symposium, where comments from central bankers can trigger significant market volatility.
Technical levels to watch
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