GBP/USD picks up from 1.2457 low, testing levels beyond 1.2550

• The pound shrugs off previous weakness and picks up to session highs above 1.2550.
• GBP/USD reversal from multi-month highs at 1.2813 finds support at 1.2460/70 area.
•  The overall trend remains negative, with Brexit and BoE pulling the pound lower.

Sterling’s reversal from multi-month highs at 1.2813 has found buyers at 1.2460/70 area to bounce up towards the mid-range of 1.2500. The pound has turned positive on the day, to trim losses following a 1.6% decline over the previous two days and hit session highs at 1.2580.

Brexit and the BoE weighing on the pound

On a bigger picture, however, investors remain cautious against the sterling. The growing uncertainty surrounding the Brexit process is the greatest deterrent against pound longs. With negotiations on a deadlock, the market is looking at a key meeting on Monday next week, although the possibility of a no-deal exit from the Union has grown very likely over the last weeks.

Beyond that, market speculation that Bank of England will announce a plan to step up its bonds purchasing scheme by at least 100 billion pounds on Thursday, has increased selling pressure on the pound.

GBP/USD: a move beyond 1.2546/51 would ease the bearish bias – Credit Suisse

The FX Analysts’ team at Credit Suisse see the pair vulnerable, although a clear move beyond 1.2550 would ease bearish pressure, “Resistance is seen at 1.2546/51 initially above which can ease the immediate downside bias with resistance then seen next at 1.2609 and with 1.2654 ideally now capping to keep the immediate risk to the downside.”