GBP/USD's launch into 1.2850 may be premature with BoE in the barrel
- Cable traders have jumped on the chance to buy the GBP/USD on positive-sounding Brexit headlines.
- The BoE's 'Super Thursday' sees plenty of opportunities for the dovish central bank to spoil the fun.
The GBP/USD is trading into the 1.2850 level after a hectic Asia market session saw the Pound take a firm step higher after headlines broke that the EU and UK may be making forward progress on Brexit talks after all, but the Bank of England's (BoE) upcoming rate call could keep the Cable under wraps.
Thursday brings the latest Interest Rate Decision and Monetary Policy Statement from the BoE, dropping on markets at 12:00 GMT, and a too-dovish showing from the UK's central bank, which continues to get knocked off of their plans to raise interest rates could see the Cable continue its bearish spiral.
The early session's headlines that Brexit deals may be forthcoming could also be premature, with the early day's announcement seeing European derivatives traders maintaining access to key UK clearing services in the event of a hard Brexit scenario, and London traders may find themselves waking up to headlines that are far more promising than they could possibly deliver; the UK's Brexit Secretary Dominic Raab has been equally promising lately, soothing markets that he's "sure" of a Brexit deal being tabled by November 21st, helping to keep the bullish mood stoked for the time being, but Brexit deadlines are increasingly tight and the negotiating table has already missed several key dates in recent months, thus Raab's words may soon carry far less weight than they used to.
GBP/USD levels to watch
The Cable's surge to the 1.2850 region puts the GBP/USD on pace to break the near-term bearish bias in current charts, but the day's early bullish romp has failed to make a successful challenge of the 200-hour moving average, sitting at 1.2865 with further resistance at early October's swing low of 1.2925, and a bearish turnaround can't be ruled out as support remains thick but weak-willed from the three-month double bottom priced in from 1.2680.