GBP/USD fades a spike to 1.4689, turns flat at 1.4670

The GBP/USD pair has gained traction in the last one hour, lifting the pair sharply higher by around 50-pips from session low of 1.4635 to 1.4689 before retracing back to yesterday’s closing level to currently trade near 1.4670.

The pair's near-term move remains anchored to developments surrounding the EU referendum on June 23, which will remain a key fundamental overhang for the UK economy and for the British Pound. Of late, 'Brexit' has led to spike in volatility around the cable and across GBP crosses.

The actual reason for a sudden spike is still unknown, but the sudden spurt clearly indicates that receding 'Brexit' fears might continue to restrict immediate downside for the GBP/USD pair and only a strong macro trigger could set-in a near-term corrective move for the pair. However, given the prospects of a Fed rate-hike in June, the pair is also unlikely to witness any sharp up-move beyond its recent highs.

Technical outlook

Efthivoulos Grigoriou, Head of Global Research and Analysis at JFD Brokers Ltd. notes, "The technical structure remains bullish to neutral, with the pair meeting some short-term buying interest around 1.4640 – 1.4660 zone. The key support for today is the next support zone around 1.4515 – 1.4530, in a case of a pullback below the first zone, 1.4640 – 1.4660, as it will take a break below this last to confirm additional bearish strength. The 50-SMA and the 200-SMA on the 4-hour chart, are currently horizontal, acting both as an immediate supports. Meanwhile, the technical indicators hold neutral within the positive territory. The upward potential will increase on a break above the critical level at 1.4770, a strong Fibonacci level, as long as it holds above the aforementioned zones, prompting a more aggressive move towards 1.4880."