GBP/USD moves up to a high of 1.2662 on the day
There isn’t much fresh Brexit news on the wires at the moment but the pound is flourishing against the dollar as resistance levels give way. Of note, the pair now breaches yesterday’s high of 1.2647 as well as the 200-hour MA (blue line) @ 1.2638. That means that the near-term bias in the pair has now turned more bullish.
Further swing region resistance levels are eyed at 1.2671 and 1.2687 before the 1.2700 handle comes into play.
The greenback is weaker across the board currently with EUR/USD also rising to a high of 1.1367 while USD/JPY is back near the lows for the day at 112.50 currently. But the pound notably is picking up decent gains compared to the rest of the major currencies bloc.
The latest word on the Brexit front is possible talks of extending Article 50. On the bright side, delaying Brexit helps to at least mitigate odds of a no-deal outcome materialising. However, on the flip side, it also arguably means no second referendum and prolonged Brexit uncertainty weighing on the economy.
But we’ll have to wait on more concrete sources to confirm such a possibility before diving into the details and pricing that in I reckon. For now, the continued dollar weakness is still part and parcel of the positioning game ahead of the FOMC meeting tomorrow.
As noted yesterday, the Fed is still seen more likely to err on the dovish side after delivering the rate hike so market participants are likely wanting to factor that in a little to not get caught on the wrong side of the fence when the announcement comes.