GBP/USD Forecast: Brexit optimism remains supportive of the positive momentum
|Despite Wednesday's slight disappointment from the UK macro data, the British Pound showed a lot of resilience and continued strengthening against its major rivals. The EU Chief Negotiator Barnier's comments, indicating that a Brexit deal is closer, further fueled the recent Brexit optimism and turned out to be one of the key factors underpinning the Sterling.
This coupled with the ongoing US Dollar corrective slide, despite a fresh leg of an upsurge in the US Treasury bond yields, provided an additional boost and lifted the GBP/USD pair back above the 1.3200 handle. The pair built on its positive momentum for the third consecutive session on Thursday and climbed to near three-week tops during the Asian session.
Today's economic docket features the release of BoE Credit conditions survey and the latest US consumer inflation figures. This coupled with speeches by the BoE Governor Mark Carney and MPC Member Vlieghe will make this another busy day for the GBP traders.
Given that the pair has managed to move back/sustain above 100-day SMA, the technical set-up now support prospects for additional gains initially towards the 1.3265-70 horizontal zone en-route the 1.3300 mark. The said handle coincides with 38.2% Fibonacci retracement level of the 1.4377-1.2662 downfall and might continue to act as an immediate strong hurdle, which if cleared decisively would set the stage for an extension of the near-term positive momentum towards the key 1.3500 psychological mark.
On the flip side, the 1.3200 handle, closely followed by the 1.3180 level is likely to protect the immediate downside. Any subsequent weakness below the mentioned support seems more likely to attract some fresh buying till the 1.3100 handle (100-DMA) and should thus, help limit any further downfall.
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