GBP/USD spikes to 1-week tops after UK PM May’s comments

   •  Renewed USD weakness triggered the initial leg of up-move.
   •  UK PM May’s comments provided an additional boost.

The GBP/USD pair added on to its daily gains and spiked to a one-week high level of 1.3160 during the early North-American session.

After an initial dip to an intraday low level of 1.3072, the pair caught some fresh bids and was being supported by some fresh selling witnessed around the US Dollar. Adding to this, August BoE rate hike prospects continued underpinning the British Pound and assisted the pair to move back above the 1.3100 handle. 

Meanwhile, the latest leg of a sharp spike over the past hour or so followed the UK PM Theresa May's comments, saying that she will take control of Brexit negotiations. The headlines helped offset earlier comments by the UK Brexit Secretary Dominic Raab, who was noted saying that the UK must prepare for all Brexit eventualities and provided a minor lift to the British Pound.

It would now be interesting to see if the pair is able to build on the momentum or continues with its struggle to make it through the 1.3160 resistance, marking 50% Fibonacci retracement level of the 1.3363-1.2957 recent downfall.

Technical levels to watch

A follow-through buying has the potential to lift the pair to 1.3190-1.3200 region before the momentum further get extended towards 1.3265-70 supply zone. On the flip side, the 1.3115-10 region now seems to protect the immediate downside and is followed by support near the 1.3070 area, which if broken might turn the pair vulnerable to aim back towards challenging the key 1.3000 psychological mark.