GBP/USD: supported in high 1.30's

Currently, GBP/USD is trading at 1.3077, up 0.27% on the day, having posted a daily high at 1.3117 and low at 1.3033.

GBP/USD rose sharply to the aforementioned highs earlier today with broad based dollar weakness making fresh YTD lows in the DXY. However, that would be expected considering how the DXY is heavily weighted by the euro that made strong gains through the 1.20 handle post the ECB today.  

US: Weekly initial claims was 298,000, an increase of 62,000 from previous week

Weekly jobless claims data for the US was also a drag and comments from the UK Brexit Minister David Davis over the need for transitional arrangements to stay close to EU membership were a prop for sterling bulls. 

However, while upward momentum has improved, analysts at UOB are not convinced that the current movement is the start of a bullish phase. "That said, GBP is expected to stay supported in the coming days unless there is a drop back below 1.2940," argued the analysts at UOB Group. 

Fed's Mester: Further gradual interest-rate rises will be needed

GBP/USD levels

Meanwhile, the year-to-date high is located at 1.3267 but analysts at Commerzbank argue that cable's up move should find strong resistance in the 1.3160 region. “A rise above the 1.3267 current August high would put the 1.3443/1.3502 September 2016 high and the 2009 low on the card," the analysts suggested. To the downside, the analysts explained that the 1.2775/59 support zone consists of the December 2016, late April and late May lows. "Below it sits the 50% retracement and 200-day moving average at 1.2688/76," the analysts noted.