GBP/USD inter-markets: light at the end of the tunnel?

GBP/USD has quickly regained around 3 cents since Tuesday’s lows in the 1.2080 area after UK’s PM Theresa May has accepted the UK Parliament to vote on her plans regarding Brexit.

The news boosted the demand for GBP and helped spot to rapidly revert a persistent selling pressure, at least for the time being, as concerns over a ‘hard Brexit’ scenario seems to have dwindled somewhat.

Yields in the UK markets are reflecting the positive impact of May’s comments, trading with gains all across the curve and lending extra support to the British pound, which is gaining over a cent vs. the greenback around the 1.2270 area.

In the meantime, ‘Brexit’ concerns are poised to remain the exclusive driver behind the pair’s price action in the near-to-medium term, while speculations on the Fed’s next rate hike should keep the pressure well and sound and at the same time keep the door open for further pullbacks. The next support now appears around the mid-1.1800s, the low posted after the recent ‘flash crash’.