The market sentiment is beginning to turn in Sterling's favor, and we see that the GBP/USD is trying to stay above the 1.30 handle in the last 3 trading days. This is probably the result of the U.K. Brexit Secretary, Dominic Raab, voicing his expectation of a Nov. 21 deal. However, market participants have a good reason to stay circumspect until a deal is done. Many Brexit challenges continue, including a tricky solution to the Irish backstop impasse. The UK government is expected to respond to European Union proposals for customs arrangement to avoid Northern Ireland border.
According to Bloomberg, with markets not fully pricing a rate increase until November 2019, if not for Brexit, the Bank of England would have a strong case for more aggressive rate hikes. The cost of hedging against further pound declines versus the US dollar and Euro, dropped to the lowest since September which is helping the Sterling positively.
On the release side, there is some disappointment for the sterling bulls, because the services PMI have fallen from 53.9 points to 52.2, instead of printing at the 53.3 points as forecast.
The technical levels to consider for today in the GBP/USD are 1.2950 on the downside and 1.3050 on the upside.