GBP/USD eases from tops, sill comfortable above mid-1.3500s amid Brexit optimism
- Expectations about an imminent Brexit deal provided a fresh lift to GBP/USD on Thursday.
- The underlying bullish sentiment undermined the safe-haven USD and remained supportive.
- Bulls now await official confirmation before positioning for any further appreciating move.
The GBP/USD pair held on to its strong gains through the mid-European session, albeit has retreated over 50 pips from an intraday swing high level of 1.3619. The pair was last seen trading around the 1.3570-75 region, up around 0.60% for the day.
Following the previous day’s late pullback of around 100 pips, the pair caught some aggressive bids on Thursday and rallied back closer to over two-and-half-year tops hit last week. Expectations about an imminent post-Brexit trade deal continued boosting the British pound. This, in turn, was seen as one of the key factors behind the strong move up for the second consecutive session.
The latest Brexit optimism remained supportive of the underlying bullish sentiment around the global equity markets and kept exerting some downward pressure on the safe-haven US dollar. This provided an additional boost to the GBP/USD pair and contributed to the strong intraday positive move. However, a delay in the official announcement held bullish trades from placing fresh bets.
Irish foreign minister Simon Coveney said there was a last-minute hitch related to language over fishing rights. As both sides sort out some last-minute details, the growing market conviction that a Brexit trade deal will be announced within hours supports prospects for a further near-term appreciating move for the GBP/USD.
Technical levels to watch