GBP/USD climbs to 2-day tops around 1.2670 post-PMI

Cable extends the recovery to the 1.2670 region.
The British Pound stays bid despite Brexit uncertainty.
UK’s Services PMI came in at 50.7 in December.

Pablo Piovano FXStreet

The upbeat sentiment around the Sterling remains well and sound for another session at the end of the week and is now lifting GBP/USD to fresh 2-day peaks in the 1.2670 region.

GBP/USD stronger despite Brexit

Following Wednesday’s drop to levels last seen in April 2017 around 1.2440, Cable staged quite a moderate rebound, gaining around 2 cents to the current 1.2660/70 band always on the back of renewed USD-selling.

The up move in the pair comes despite the lack of any progress in the Brexit talks. In fact, and according to latest news, the majority of Tory members would not support PM May’s Brexit deal, deteriorating further the current scenario around the EU-UK divorce.

Still on the other side of the Channel, the key Services PMI surprised to the upside at 51.2 for the month of December, reverting November’s drop to 50.4 and staying well into the expansion territory.

What to look for around GBP

As always, Brexit negotiations remain vital for the price action around the British Pound. All eyes at the moment are upon the resumption of the debate of PM May’s plan in the House of Commons on January 9. However, GBP is expected to trade on a ‘heavy’ fashion as the likelihood of a ‘no deal’ outcome appears to be gathering traction as of late.

GBP/USD levels to consider

As of writing, the pair is up 0.31% at 1.2670 facing the next hurdle at 1.2782 (55-day SMA) seconded by 1.2816 (high Dec.31 2018) and then 1.2897 (100-day SMA). On the other hand, a breach of 1.2477 (2018 low Dec.12) would open the door to 1.2438 (2019 low Jan.2) and finally 1.2363 (monthly low Jul.4 2017).

Author

Pablo Piovano

FXStreet

Born and bred in Argentina, Pablo has been carrying on with his passion for FX markets and trading since his first college years.

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