GBP/USD leaps above 1.30 on Barnier comments
- EU's Barnier says Brexit deal is realistic in 6-8 weeks.
- GBP gathers strength against all major rivals.
- The manufacturing sector in the UK loses momentum in July.
The GBP/USD pair gained more than 100 pips in a matter of minutes after the EU's Chief Brexit Negotiator, Michel Barnier, delivered optimistic comments surrounding the divorce talks with the UK. At the moment, the pair is trading at its highest level in ten days at 1.3035, adding nearly 1% on the day.
Speaking at a conference in Bled, Slovenia, Barnier stated that they were close to reaching an agreement on the UK-EU security ties and added that it would be realistic to expect an orderly Brexit deal in 6-8 weeks. Regarding the Chequers plan, Barnier refuted the claims that it was rejected by the EU and said that it was useful.
Earlier in the day, the data from the UK showed that manufacturing production contracted by 0.2% on a monthly basis in July while the industrial production only expanded by 0.1% in the same period and both readings fell short of the analysts' estimates. On a positive note, the monthly real-GDP growth came in at 0.2% in July to beat the market consensus of 0.2%.
The sharp upsurge seen in the GBP/USD pair seems to be putting the greenback under a broad-based selling pressure and the DXY was last seen down 0.25% on the day at 95.10.
Technical levels to consider
The pair could encounter the first technical resistance at 1.3125 (100-DMA) ahead of 1.32 (psychological level) and 1.3270 (Jul. 17 high). On the downside, supports are located at 1.3000 (psychological level), 1.2955 (50-DMA) and 1.2900 (20-DMA/daily low).