GBP/USD testing north of 1.31 as Brexit hopes get boosted

• The Cable sees fresh upside pressure building as markets latch onto hopeful Brexit headlines once again.
• With the US off for a long weekend, Monday markets will be even more volume-constrained than usual.

The GBP/USD pairing is trading into the 1.31 major level as Brexit concerns swung back into Brexit hope last week, and GBP bidders will be looking to keep the good times rolling, but with Brexit ruling the GBP/USD trading space, headlines will remain firmly in control of traders’ broader market.

Monday is a holiday stateside, keeping the brunt of the early week’s volatility limited to the London market session, and a thin calendar with only the BRC’s Retail Like-For-Like Sales late at 23:01 GMT (previous 0.2%) will see markets keeping a close eye on Brexit developments, with the EU set to be handing  down an alternative trade deal for the UK this Wednesday.

GBP/USD levels to watch

The Sterling has managed to mark in a higher low on the Daily candles, but the pair remains firmly to the downside, according to FXStreet’s Chief Analyst Valeria Bednarik: “the pair bottomed for the week at 1.2921 and closed it up some 200 pips above this last, and despite closing with gains, it settled below a major Fibonacci resistance at 1.3170 and established a third consecutive lower low, a sign that the pair is far from bullish. In the daily chart, the price recovered up to a flat 20 DMA, while technical indicators head higher around their midlines, living a neutral technical stance. In the 4 hours chart, the pair recovered above its 20 SMA and 200 EMA, with the shortest gaining upward traction, while technical indicators near overbought readings before losing upward strength, holding anyway nearby, supporting an upward extension up to the mentioned resistance. A strong static support comes at 1.3060, with a break below the level putting the pair on the bearish path short-term.

Support levels: 1.3060 1.3015 1.2970

Resistance levels: 1.3130 1.3175 1.3210