- Summary:
- The GBP/USD soars to 3-month highs on the post-Brexit trade deal optimism as well as the BoE decision which left rates unchanged.
The GBP/USD continues its 4-day winning run on the back of Brexit deal hopes as well as the BoE decision and statement.
The BoE also said it was not going to raise rates until its inflation targets were met, and extended the TFSME drawdown period to October 31, 2021. There was some cautious approach to the markets by traders, as many watched to see if the BoE would drop the hammer on rates and send them to negative territory. This did not happen and the asset purchase facility was also kept steady; both GBP-positive events.
Comments by EU Chief Negotiator on the possible achievement of a post-Brexit trade deal by Friday also pleased those bullish on the cable, even though officials on the UK side were not as optimistic. All told, markets appear pleased with what the news served today, and the cable is up 0.67% at the time of writing.
Technical Levels to Watch
The surge to 30-month highs sees the GBP/USD pull out of the ascending channel and claim the 1.36117 target. However, this resistance has capped further upside on the pair, with 1.37916 only becoming achievable if 1.36117 is taken out.
On the flip side, a decline that follows the rejection at the current resistance targets 1.35134, with 1.34765 and 1.33193 serving as an additional target.
GBPUSD Daily Chart
