GBP/USD recovery extends beyond 1.3250 on Brexit deal hopes
- GBP/USD appreciates for the third day in a row to reach 1.3270 highs.
- The pound rallies as UK negotiator David Frost boosts deal hopes.
- The pound is aiming to levels past 1.3280 – UOB.
The sterling has accelerated its rebound from last week lows at 1.3100 returning above 1.3200 to hit session highs at1.3270 as comments from UK chief negotiator, David Frost have boosted confidence about a Brexit deal.
Brexit remains the main pound driver
The previous concerns about the differences in key issues seem to have vanished after Britain’s chief negotiator, David Frost, commented to Boris Johnson that he expects a trade deal to be signed early next week, according to a news report by UK newspaper The Sun.
Investor’s enthusiasm, however, has been curtailed by Prime Minister Boris Johnson who, according to Reuters, has warned his top ministers that the deal is still far from certain. This has kept the pound from rallying further.
GBP/USD seen appreciating beyond 1.3280 – UOB
The FX analysis team at UOB remains bullish on the pair pointing out to 1.3280 and 1.3320 as the next targets: “GBP traded between 1.3167 and 1.3242 yesterday before closing largely unchanged at 1.3202 (+0.02%). Upward momentum is showing tentative sign of improving and while GBP could move above the 1.3250 resistance, it may not be able to maintain a foothold above this level. Next resistance is at 1.3280. Support is at 1.3185 followed by 1.3160.”
Technical levels to watch