GBP/USD Daily Price Forecast – GBP/USD Got a Bullish Boost on Brexit Optimism

The British Pound rallied hard on Wednesday following the EU chief Brexit negotiator Michel Barnier’s positive remarks, saying that “we are prepared to offer Britain a partnership such as there has never been with any other third country.” The comments were seen as a gesture that the EU is also committed to a deal and eased fears of a no-deal Brexit, triggering a heavy round of short covering around the British Pound. The GBP/USD pair surged over 185-pips from an intraday low level of 1.2845 and hit fresh four-week highs at 1.3039 on overnight bullish consolidation as traders now await fresh impetus for the next push higher. So far this Thursday, the spot maintains the upbeat momentum, triggered by renewed Brexit optimism while broad-based US dollar weakness amid flattening US yield curve and latest Trump’s adjustment on the US metals tariffs also lends support to the prices.

Brexit News to Remain Major Driving Force For GBP For Next Two Trading Sessions

The comment from Barnier offered the much-needed respite to the GBP bulls, who were eagerly awaiting some breakthrough on the ongoing Brexit negotiations. The momentum lifted the pair back above the key 1.30 psychological mark which has since remained unaffected by an upward revision of the US Q2 GDP growth figures. The pair tested 50-day SMA hurdle, around the 1.3040 region, during the Asian session on Thursday and now seems to have entered a bullish consolidation phase near four-week tops. In absence of any major market moving UK economic releases, the latest Brexit optimism might continue to underpin the Sterling and limit immediate downside. Later during the early North-American session, the US economic docket, featuring the release of core PCE price index, personal income/spending data and the usual initial weekly jobless claims, will be looked upon for some short-term trading opportunities.

British side of market will see relatively silent calendar with release of the UK mortgage approvals and net lending to individuals data due on the cards at 0830 GMT but neither of this news will have any big impact on market momentum. From a technical perspective, overnight bullish breakthrough the descending trend-line barrier now seems to have shifted the near-term bias from bearish to bullish and thus, increase prospects for an extension of the positive momentum. A sustained move beyond the 1.3040-60 region would further reinforce the bullish breakout and continue lifting the pair towards reclaiming the 1.3100 handle en-route the 1.3130-40 supply zone. On the flip side, any meaningful retracement back below the 1.3000 handle might now attract some fresh buying near 1.2970 level and is followed by an important resistance break-point, now turned support near the 1.2940-35 zone, which should now act as a near-term bottom.