GBP/USD spikes beyond 1.3300 mark and retreats

   •  Upbeat UK earnings data/fall in unemployment rate provided a minor lift earlier.
   •  Incoming Brexit headlines further boost sentiment surrounding the British Pound.

The GBP/USD pair remained well bid through the mid-European session and spiked beyond the 1.3300 handle in the last hour, albeit quickly retreated few pips thereafter.

The pair regained positive traction on Tuesday and built on the overnight bounce from sub-1.3200 level, touched in reaction to the House of Commons John Bercow's ruling to block the government’s motion for yet another vote on the UK PM Theresa May's Brexit deal.

The uptick got an additional boost from today's surprisingly stronger UK average earnings data, advancing 3.4% m/m, and drop in the unemployment rate, falling to 3.9% in January, which largely offset an unexpected jump in the number of people claiming unemployment-related benefits.

Meanwhile, the latest leg of a sudden pickup in the last hour or so could further be attributed to a Bloomberg report, saying that the EU leaders were planning to make a "contingent offer" on Brexit extension and allow May to try to get the deal through parliament next week.

However, the fact that the UK government will have to come back with substantial changes in order to get the deal passed through the Parliament, especially after the overnight dismissal of the third meaningful vote, kept a lid on any strong follow-through up-move, at least for the time being.

On the other hand, the US Dollar bulls remained on the defensive amid growing expectations that the Fed might opt for a more accommodative policy stance this week but did little to influence the price-action, albeit remained supportive of the prevalent bid tone.

In absence of any major market moving economic releases from the US, the incoming Brexit-related news/developments might continue to drive sentiment surrounding the British Pound and turn out to be an exclusive driver of the pair’s momentum through Tuesday’s trading session.

Technical levels to watch