GBP/USD hanging just below 1.2900 after premature Brexit hope

The GBP/USD is bumping into the 1.2880 region after Thursday's mid-day announcement of a flurry of Brexit deals saw the Cable surging over 1.2% into a new weekly high of 1.2927 before bedding back down just shy of the 1.2900 major technical level.

Friday's economic calendar remains free and clear of UK data on the offering, but Brexit headlines would have rendered any data largely irrelevant anyway, after UK sentiment pinned firmly into the optimistic end of the spectrum yesterday following several leaks surrounding the EU-UK's latest 'agreement to have an agreement', wrapped up in a new Brexit agreement that remains to be agreed to. Spain remains a tricky thorn in the side of both parties, threatening to overturn the newest agreement when it gets voted on at the EU-UK Brexit summit on Monday unless sufficient 'clarity' on Gibraltar's borders are included in the text of the agreement. Following that, the new raft of Brexit agreements, which waits to be completed this weekend, will need to survive a vote within the UK's own parliament, which is summarily stacked with Eurosceptic Brexiteers who continue to threaten to veto any agreement tabled by Prime Minister Theresa May, leaving significant headwinds on the path to a clean Brexit.

GBP/USD Levels to watch

Despite obvious pitfalls looming ahead, Brexit optimism has left the Pound in an elevated chart position, but even that sees itself teetering on the brink, as noted by FXStreet's own Valeria Bednarik: "according to technical readings in the  4 hours chart, as the rally stalled well below a mild bearish 200 EMA, although above a directionless 20 SMA, while technical indicators entered positive ground before losing directional strength. Given the Brexit situation, the upward potential for the Pound is quite limited, with spikes being taking as selling opportunities by speculative interest."

Support levels: 1.2840 1.2800 1.2765  

Resistance levels: 1.2890 1.2930 1.2965