The pound is the only currency outperforming the dollar so far today
The pair moved to a low of 1.2945 earlier in the session but held on to near-term support close to 1.2950 before rebounding to its best levels on the day now. Buyers are looking to keep a break above 1.3000 and that will be the key focus ahead of the weekend.
Should the pound hold on to gains today against the dollar, that would mark ten straight days of gains for cable – its best run since June when it moved from 1.2230 to 1.2800.
One can argue that the 1.3000 handle is an even bigger landmark as price pushes to near five-month highs now. From a technical perspective, there is little in the way stopping the pair from a potential push towards the 9 March high @ 1.3200 next.
It is tough to argue why the pound is largely outperforming today. Month-end and positioning flows are the likeliest factor – similar to what we saw in April – as we see the euro and pound get pushed around by EUR/GBP selling for the most part.
Besides that, there isn’t quite any one reason to pinpoint at this stage.
But other than that, Brexit negotiations are still going nowhere as we move closer to crunch time in September. So, there’s also that to consider in the weeks ahead.