GBP/USD clipping higher on rising Brexit expectations

The Cable is stretching into recent highs as Brexit hopes return to the forefront.
It's a hectic day for speeches in the UK ahead of the US CPI reading.

Joshua Gibson FXStreet

The GBP/USD is getting buoyed by a step-down by the US Dollar, and the Cable is testing into 1.3225.

Positive-leaning Brexit headlines are helping to provide support for the GBP heading into Thursday, with UK Prime Minister Theresa May gearing up to try and swing a temporary trade agreement with the European Union following Brexit, at least until a firmer plan can be realized.

Eurosceptics within PM May's own government are already baying for blood, and calls are beginning to arise for the dissolution of May's government, but bullish hopefuls are focusing on the positives for the time being.

It's going to be a tense day on the economic calendar for the Cable, with an early speech from the Bank of England's (BoE) Carney at 05:00 GMT, to be followed by the BoE's Credit Conditions survey at 08:30 GMT, another appearance from Mark Carney at 09:00 GMT, and finally a speech from MPC Voting Member Vlieghe at 10:45 GMT; after that will be the US' CPI reading at 12:30 GMT, and core inflation in September is expected to tick up from 2.2% to 2.3%.

GBP/USD levels to watch

The Sterling could be in a cushy position to claim further upside, according to FXStreet's own Valeria Bednarik: "the GBP/USD pair seems comfortable above the 50% retracement of the 2016/18 rally, now turned into support at around 1.3175. The pair has been unable to sustain gains for long above the level in the last two months, so caution is recommended, although further positive Brexit-related headlines should keep it on the bullish side. The short-term technical picture favors additional gains, moreover, if the pair breaks above 1.3215, Sep 26 high, as, in the 4 hours chart, technical indicators maintain their upward slopes near overbought readings, while the price advanced well above a firmly bullish 20 SMA."

Support levels: 1.3175 1.3130 1.2990

Resistance levels: 1.3215 1.3245 1.3290

Author

Joshua Gibson

FXStreet

Joshua joins the FXStreet team as an Economics and Finance double major from Vancouver Island University with twelve years' experience as an independent trader focusing on technical analysis.

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