In less than a week, GBPUSD gained nearly 6% against the greenback. Yesterday, the pair refreshed five-month highs around the 1.30 psychological level which served as a resistance. On Friday, the pound retreats marginally and has settled around 1.2850, awaiting further development surrounding Brexit.
The recent rally came as the EU and UK agreed on a Brexit deal. Still uncertainty remains. As such, DUP leader Foster reaffirms that they will oppose Johnson's Brexit deal while Wilson, another DUP official, said they will encourage Tory lawmakers to oppose Johnson's deal.
Now, traders are bracing themselves for a crunch vote in the UK Parliament tomorrow, with the outcome of the vote will trigger a significant market reaction early next week. Should the Parliament vote against the deal, the pair could decline dramatically from the current levels and get back below the key moving averages.
In the immediate term, GBPUSD may stay afloat, with sterling derives some support from recent comments by Bank of England’s Ramdsen who said that smooth Brexit would put rate hikes on the table.