GBP/USD jumps to new 12-day high near 1.2890 amid broad-based USD weakness
- The market shows a limited reaction to comments from Barnier and Raab.
- US Dollar Index extends losses in the NA session.
- Dallas Fed's Kaplan voices his support for gradual rate hikes.
Following the joint press conference by Dominic Raab, British Secretary of State, and Michel Barnier, European Commission Chief Negotiator for Article 50 Negotiations with the UK, the GBP/USD rose above the upper limit of its daily range and refreshed its highest level since August 9 at 1.2886. As of writing, the pair was trading at 1.2881, adding 85 pips, of 0.66% on the day.
Barnier said that the negotiations were entering their final stage. "We’re far more advanced in defining common ground for security cooperation than trade," Barnier further added and reiterated that the EU single market must be respected in the economic partnership. Commenting on the possibility of a no-deal Brexit, Raab repeated that they needed to be prepared for all eventualities and stated that they were hoping to reach a deal "not much later than November."
On the other hand, the US Dollar Index came under sudden selling pressure in the NA session. Although there were no clear fundamental catalysts behind the renewed USD weakness, the fact that the S&P 500 reached a new record high seems to be hurting the greenback, which had been finding demand as a safe-haven lately. At the moment, the index is down 0.45% on the day at 95.30.
Technical levels to consider
The initial resistance for the pair aligns at 1.2910 (Aug. 9 high) ahead of 1.3000 (psychological level) and 1.3055 (50-DMA). On the downside, supports could be seen at 1.2875 (20-DMA), 1.2800 (psychological level/daily low), and 1.2730 (Aug. 20 low).