- Investors looked past this week’s flurry of disappointing UK macro data.
- Renewed Brexit optimism provides a strong boost to the British Pound.
- A subdued USD price action remained supportive of the bullish move.
The buying interest around the British Pound picked up strong pace in the last hour or so, lifting the GBP/USD pair to one-week tops around the 1.2380-50 region in the last hour.
The pair initially ticked lower on Thursday following the release of yet another disappointing release of UK services PMI, which unexpectedly fell into contraction territory to 49.5 in September as against the previous month’s reading of 50.6. The downtick, however, turned out to be short-lived and remained confined well within this week’s broader trading range.
Brexit optimism lifts the Pound
Meanwhile, the latest leg of a sudden pick up over the past hour or so could be attributed some renewed Brexit optimism, wherein Tories – including those who opposed the previous deal – and the DUP extended support to the UK PM Boris Johnson’s new Brexit proposal.
The upsurge took along some short-term trading stops being placed near the 1.2340-50 supply zone, which further seemed to have collaborated towards accelerating the momentum. Meanwhile, a subdued US Dollar price action – further weighed down by a larger-than-expected rise in the US initial weekly jobless claims -remained supportive.
It will now be interesting to see if the pair is able to capitalize on the bullish move or meets with some fresh supply at higher levels as market participants now look forward to Johnson’s talks with European Council President Donald Tusk, which could spark another major swing later this Thursday.
Technical levels to watch
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