GBP/USD jumps back to 1.2740 as Tories and DUP reach a deal

GBP/USD’s retreat from five-day tops of 1.2759 stalled just ahead of 1.27 handle, as the bulls regained footing on the latest UK political headlines, sending the rate back to 1.2740 levels.

The latest move higher in the spot is mainly driven by renewed optimism, as the UK PM May’s Conservatives party finally managed to secure a deal with the Democratic Unionist Party (DUP) in a bid to form a minority government.

Meanwhile, stalled USD buying across the board amid gold-price recovery, also aided the bounce in cable. However, it remains to be seen if the major can the minor-bounce above 1.27 handle, as investors remain wary over the full terms of the deal and how it might play out on the Brexit issue.

Markets digest the latest deal between Theresa May and Arlene Foster to sign a £1bn confidence and supply agreement. Next of note for the major remains the US durable goods data lined up for release in the NA session today, which will also have a significant impact on GBP/USD.

GBP/USD levels to consider             

Valeria Bednarik, Chief Analyst at FXStreet offers key technical levels for the spot: “Technically, the 4 hours chart shows that the price keeps retreating towards a bullish 20 SMA, this last offering an immediate dynamic support around 1.2690, while technical indicators retreat within positive territory, supporting a bearish extension on a break below the mentioned level. Next intraday supports come at 1.2665 and 1.2635, with further slides below this last exposing 1.2588, the low set last week.”