GBP/USD fades the spike to 1.3430

• Cable retreats from 1.3430, fresh multi-week tops.
• Positive Brexit headlines helped GBP.
• Attention now is on Yellen’s testimony.

After climbing to fresh tops in the 1.3430 area earlier in the session, GBP/USD has now receded to the vicinity of the 1.3390 area.

GBP/USD propped up by Brexit news

The ongoing rally in Cable found extra oxygen in recent news citing the UK and the EU are close to clinch a deal on the so-called ‘divorce bill’, which gyrates around £50 billion for the time being.

In the meantime, the pair is flirting with the critical resistance area determined by the 2014-2017 downtrend, today around 1.3430. A sustainable breakout of this region could lead to a test of 2017 tops in the 1.3660 zone, levels last seen in September. In light of recent activity in GBP futures markets, this scenario still remains likely in the near term.

Looking ahead, Governor M.Carney and MPC member D.Ramsden will speak later in the European afternoon.

GBP/USD levels to consider

As of writing, the pair is up 0.45% at 1.3405 and a break above 1.3431 (high Nov.29) would open the door to 1.3447 (high Sep.6 2016) and finally 1.3658 (2017 high Sep.20). On the other hand, the next down barrier aligns at 1.3294 (10-day sma) seconded by 1.3268 (55-day sma) and then 1.3222 (low Nov.28).