• UK PM May will set out a new proposal for her Brexit deal at 15:00 GMT.
• Traders opt to cover short positions in anticipation of a compelling offer.
The GBP/USD pair quickly reversed a mid-European session dip to fresh multi-month tops and rallied over 50-pips in the last hour.
Having dropped to 1.2685 level - the lowest since mid-Feb., the pair witnessed an intraday turnaround and the latest leg of a sudden upsurge came after the UK government spokesman confirmed that PM Theresa May will set out a new proposal for her deal in a speech at 15:00 GMT.
The spokesman further added that Cabinet discussed a new deal that is to be presented in parliament, which includes alternative arrangements, assurances on UK integrity in the event that the backstop is triggered - though there was nothing significant in terms of positive Brexit development.
The price action, however, seemed to suggest some short-covering move ahead of the event risk, wherein May's offer might turn out to be compelling enough to convince the UK lawmakers to vote for her and pass the Withdrawal Agreement Bill.
Hence, it would be prudent to wait for a strong follow-through buying before confirming that the pair might have actually bottomed out in the near-term and positioning for any further near-term recovery amid persistent Brexit uncertainties.
Technical levels to watch
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