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GBP/USD Clears Notable Upside Levels

EURGBP
  • Latest push higher tips GBP/USD through the bull trigger and puts prices at the best level since mid-August. Clearance and a close above 1.2720 and 1.2733 opens 1.28, not only the psychological level, but also the Aug22 high.
  • The weak USD backdrop persists after the Fed late yesterday, while support for GBP followed Bailey's post-decision comments: "It's really too early to start speculating about cutting rates", "We are more cautious than markets".
  • Despite GBP gains, EUR/GBP remains higher post-ECB, but is contained just below the 100-dma of 0.8637 as momentum lacks after the failed break to new daily highs. Implied vols are unsurprisingly on the backfoot, with 1w EUR/GBP vols retreating over a point from the mid-week best levels.

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