GBP/USD advances to 1.2950 area on latest brexit headlines

  • UK junior business minister says there won't be a no-deal Brexit.
  • PM May spokesman reiterates that the PM is looking to reopen the withdrawal agreement.
  • US Dollar Index recovers to 97 area on Tuesday.

The GBP/USD pair gained traction in the last hour and advanced to a fresh 10-day high of 1.2959 as the pound sterling gathered some strength on latest Brexit headlines. As of writing, the pair was trading at 1.2945, adding 0.2% on a daily basis.

Junior business minister Richard Harrington earlier in the day said that he did not believe that there would be a no-deal Brexit. Furthermore, Prime Minister Theresa May's spokesman told reporters that the PM was still looking to reopen the withdrawal agreement and added that tomorrow's meeting between the EU's Juncker and PM May was an important part of the "process of the engagement with the EU."

Earlier in the day, the UK's Office for National Statistics reported that the unemployment rate stayed unchanged at 4% in December as expected and the claimant count rate remained steady at 2.8%.

The only data release from the U.S. on Tuesday will be the NAHB's Housing Market Index for February and the US Dollar Index is up 0.14% on the day at 96.90. Nonetheless, the pair is unlikely to make any sharp movements ahead of tomorrow's critical Juncker-May meeting. Additionally, the FOMC is scheduled to publish the minutes of its January 29-30 meeting.

Technical levels to consider

The pair could face the first support at 1.2935 (200-DMA) ahead of 1.2880 (50-DMA) and 1.2785 (Feb. 15 low). On the upside, near-term resistances are located at 1.2970 (20-DMA), 1.3000 (psychological level/Feb. 7 high) and 1.3030 (Feb. 5 high).

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