GBP/USD spikes to session highs after Forbes comments

The GBP/USD gathered some bullish momentum in the late NA session following the hawkish comments from the Bank of England policymaker Kristin Forbes and refreshed its session high at 1.2691. After the initial reaction, the pair eased back and is now trading at 1.2685, up 0.11%, or 14 pips, on the day.

Forbes said that the cost of reversing a rate hike was a concern for some MPC members and the MPC was spending a lot of time debating how changes in interest rates would affect the GBP. She further added that Brexit uncertainty might affect consumer or businesses more in the future. 

• BoE's Forbes: Cost of reversing a rate hike is concern for some MPC members

Despite that latest modest rise, the pair remains within a tight 40-pip range. As we approach the end of the trading day, the US Dollar Index is virtually unchanged at 97.25 on the day. Although tomorrow's economic calendar doesn't feature any data from the U.K., Kristin Forbes will be speaking again in the late NA session. Before Forbes' speech, Markit will be releasing PMI figures for the United States.

• GBP prospects are a little clearer? -Scotiabank

Technical outlook

FXStreet analyst Valeria Bednarik explains that from a technical point of view, the 4 hours chart shows that the pair has been trading below a bearish 20 SMA, unable to extend beyond it, but holding nearby ever since the day started. She further adds that in the same chart, technical indicators have advanced within the negative territory, but pared gains around their mid-lines, not enough to confirm a new leg higher. Nevertheless, a break above 1.2710/20, the immediate resistance, could favor an advance for this Friday.

According to the analyst, supports could be seen at 1.2635, 1.2590 and 1.2560 while the resistances align at 1.2715, 1.2750 and 1.2795.

• GBP/USD to break 1.2815? - Scotiabank