GBP/USD rises to a high of 1.2747 in the last hour as the pound recovers
It’s hard to read anything into any pound jumps over the last two weeks. They tend to come rather unexpectedly and sudden but if there is one thing that’s certain is that they will always be faded.
The pound rallied yesterday on rekindled hopes of Article 50 being revoked but that was rather short-lived as sellers came back in to drive the advance lower to break below the August low of 1.2662 temporarily.
Yesterday’s low hit 1.2659 before price bounced back up a little. Cable has been trading around just below the 1.2700 level for the most part today but has come to life over the past two hours as the pound recovers some poise and the dollar loses a bit of ground.
Price now looks towards a test of the 100-hour MA (red line) @ 1.2753 with the UK services PMI data due in a couple of minutes. Regardless of what the data release may be, the pound’s hopes still relies on Brexit. Hence, even if the release later is a positive one, I don’t expect any pound advance on that to last the course.
May’s odds of winning the meaningful vote next week still aren’t great. And as long as that remains, the element of uncertainty that follows if she loses the vote will continue to be the driving force in keeping the pound lower and fuel any rally-selling over the next few sessions.