GBP/USD stages solid comeback, 1.3250 back on sight

• USD rebound loses steam 
• Shrugs off downbeat UK CBI realized sales
• UK’s Brexit Sec Davis’ comments underpin

Amid stalled USD recovery and upbeat remarks from the UK’s Brexit Secretary Davis, the GBP/USD pair attempted a sharp ‘V’ shape reversal from a downward spike to 1.3180 levels.

GBP/USD: Will the recovery sustain?

The spot keeps its recovery mode intact, despite the awful UK realized sales report published by the CBI for the month of October, as the bulls find respite from stalled broad-based US dollar recovery amid weaker Treasury yields. The USD index reversed sharply from 93.66 highs to now flirt with the midpoint of 93 handle, having erased most gains.

Meanwhile, upbeat remarks from the UK’s Brexit Secretary Davis, citing that should the Brexit negotiations go as anticipated, the Parliament will vote on the EU exit deal before Dec/ Jan 2018/19, also offered fresh lift to the pound while strong UK Q3 GDP figures continue to remain GBP-supportive, pushing the case for a BOE rate hike as early as next week.

The UK Q3 2017 prelim GDP unexpectedly rises to 0.4%

Markets now look forward to the ECB decision on the QE program and Draghi’s speech for fresh cross-driven play on Cable. The pair will also get influenced by the US data releases due on the cards in the NA session.

GBP/USD Technical View

Valeria Bednarik, Chief Analyst at FXStreet, writes: “In the 4 hours chart, the pair is now below a horizontal 200 EMA, but still above a marginally bullish 20 SMA, whilst technical indicators turned sharply lower, pressuring their mid-lines but without confirming further slides ahead. Below 1.3180, the pair has scope to extend its decline towards 1.3145 first, whilst further slides will likely see the pair hitting the 1.3090 price zone. Above the 1.3220 region, the pair will lose some of this short-term bearish pressure, with room those to recover back to the 1.3280 price zone.”