GBP/USD rises to a two-week high
The dollar may be on the back foot as we begin the session but the pound is the leading currency among the major bloc currently. That’s seeing GBP/USD rise to its highest level since 22 October as the pair reaches a session high of 1.3085 on the day.
Brexit optimism is yet to be dashed since weekend reports of a potential deal in the works surfaced. And that continues to keep the pound bid so far over the past two days. For cable, price looks to be holding a break above the 100-day MA (red line) now and technically that’s a good sign for buyers.
The next resistance level to look out for will come around the 1.3100 region. As for risk events in the day ahead, it’s going to be all about Theresa May’s meeting with Cabinet ministers. It is reported that they will meet in “strict secrecy” to discuss the latest options for a Brexit deal as May continues to push towards getting a deal done by the end of the month.
Expect plenty of rumours/headlines to come about as and when the meeting comes about and that will add more volatility to the pound later on in the day. With the Irish backstop/border issue still looking like it’s going nowhere, I’m not going to hold my breath for a breakthrough in discussions this week.
For now though, proceed with cautious optimism until told otherwise.