- Sterling pops on Brexit news.
- Avoidance of a hard Brexit scenario could open some much-needed room above the GBP.
The GBP/USD popped into recent highs early in the overnight session and is trading just above the 1.3500 handle once again.
The Sterling caught a quick boost after an announcement from the UK that the British Parliament would be willing to stay within the EU customs union beyond 2021 in an effort to head-off a ‘hard-Brexit’ scenario. The headlines quickly took the GBP/USD up about 30 pips on reaction, and the Sterling is continuing to drift upwards.
The rest of the Thursday market window brings little of note for the GBP/USD with little on the economic calendar, and GBP traders will be left to digest the safety net of avoiding a hard Brexit as general market sentiment appears poised to continue aa mild recovery.
GBP/USD levels to watch
The Sterling’s technical outlook is still decidedly bearish, as described by FXStreet’s Valeria Bednarik: “the pair gained downward potential despite holding above its weekly low of 1.3450, as intraday recoveries stalled short of 1.3600, the previous selling level. In the 4 hours chart, the pair is developing below its 20 SMA that slowly turns south, while the Momentum indicator extended its decline to fresh 1-week low. The RSI indicator in the mentioned chart hovers around 43, following price’s action higher, but within familiar levels, far from indicating an upcoming upward move. Below 1.3450, the next relevant support comes at around 1.3410, where the pair has multiple relevant daily highs from last December.”
Support levels: 1.3450 1.3410 1.3365
Resistance levels: 1.3520 1.3570 1.3610