GBP/USD surges through 1.33 handle, hits near 3-week tops ahead of US data

Haresh Menghani FXStreet

The GBP/USD pair built on previous session's Brexit news-led sharp recovery move and surged through the 1.3300 handle to near two-week tops.

Currently trading around 1.3320 level, the pair held in positive territory for the fifth consecutive session and was being supported by overnight news report that the EU's chief Brexit negotiator, Michel Barnier, might offer the UK a two-year transition period to stay in the EU market.

• UK: Deal or No Deal… transition deal holds key to GBP sentiment in the near-term - ING

The pair also seems to be deriving some support from a sharp slide in the EUR/GBP cross, which extended previous session's sharp reversal slide from near one-month tops and broke below the 0.8900 handle.

Apart from the Brexit headline, BoE rate hike prospects and a mildly softer tone around the US Dollar remained supportive of the pair's strong up-move to its highest level since Oct. 2.

• UK: Heading towards the first rate rise in a decade - HSBC

Investors now look forward to the US economic docket, highlighting the release of latest inflation figures, seconded by monthly retail sales data and Prelim UoM Consumer Sentiment. This, along with Fedspeaks, would provide some fresh impetus for the pair's next leg of directional move.

• US: Higher inflation profile is anticipated - Scotiabank

Technical levels to watch

Immediate resistance is pegged near the 1.3335-40 region, above which the pair is likely to dart towards reclaiming the 1.3400 handle with some intermediate resistance near 1.3375 level.

On the flip side, any pull-back below the 1.3300 handle now seems to find support near the 1.3270-65 region, below which the pair could drift back towards the 1.3200 round figure mark.

Author

Haresh Menghani

FXStreet

Haresh Menghani is a detail-oriented professional with 10+ years of extensive experience in analysing the global financial markets.

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