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GBPUSD Surges On the Back of USD Selling, Targeting New 2020 Highs

GBPUSD
GBPUSD

The GBPUSD bounced off yesterday’s lows at the nearest support and is up a healthy 90 pips on the day at the time of writing, as broad-based USD selling continues to be the order of the day. This has helped the cable to overcome any negative headlines from the Brexit trade talks so far this Thursday. 

An unnamed top EU diplomat who spoke to Reuters today hinted that securing a level playing field and closing the fisheries gap remained outstanding issues to be sorted out in the trade negotiations with the UK. The same diplomat also said that what both sides needed to agree on was “quite substantial”, suggesting that a deal was not as close as the markets had hoped. 

These statements did not put a dampener on bullish sentiment on the GBPUSD, even as the UK Parliament is set to debate amendments to the controversial Internal Market Bill on Monday. 

Technical Levels to Watch

The active daily candle is making another attempt at breaking above the channel’s upper border after yesterday’s downside move came due to rejection at that level. The 1.34765 price level is the new target for the GBPUSD’s breakout move, with 1.35134 also lining up as a nearby target. Attainment of this latter target would send the GBPUSD to its highest level since May 2018. 

On the flip side, a pullback towards 1.33193 may follow a rejection at the channel’s border or the 1.34765 resistance level. Further weakening that aims to take the pair towards the channel’s lower boundary would have to take out 1.32663 and 1.31754 along the way. 

GBPUSD Daily Chart