GBP/USD regains 1.3100 and above, UK politics on sight

The now better tone around the Sterling is pushing GBP/USD back above the critical up barrier at 1.3100 the figure, or fresh daily tops.

GBP/USD finds support near 1.3030

Cable met fresh buying interest at the beginning of the week, all against the backdrop of increasing rumours citing the likelihood of a cabinet re-shuffle in the UK. Same rumours are placing Boris Johnson as a likely candidate to step down.

In the meantime, the lack of significant progress in the Brexit talks is poised to stay as a persistent source of uncertainty and weakness around the British Pound in the medium to longer run.

In the same line, GBP also appears somewhat underpinned by market chatter expecting the Bank of England to hike rates at the November meeting.

Further out, speculators increased their net long position to levels last seen in early September 2014 during the week ended on October 3, as per the latest CFTC report.

Nothing scheduled data wise in the UK docket today, while industrial/manufacturing production, construction output and trade balance figures are all due tomorrow.

GBP/USD levels to consider

As of writing the pair is advancing 0.40% at 1.3118 and a breakout of 1.3132 (55-day sma) would open the door to 1.3262 (23.6% Fibo of the 2017 up move) and finally 1.3275 (10-day sma). On the other hand, the immediate support aligns at 1.3027 (100-day sma) followed by 1.3018 (100-day sma) and then 1.2851 (low Aug.31).