GBP/USD climbs to highest in over two months as buyers stretch their legs

The pair is up 0.3% as the pound is among one of the more solid performers on the day. The nudge higher also owes to some dollar sluggishness across the board as risk trades are faring better in general.

The turnaround in equities yesterday is keeping the overall mood more optimistic and that continues to percolate across broader markets.

Of note, cable buyers are also able to defend the push above the 100-day moving average (red line) from last week. That is a positive factor on the technical front and adds to tailwind for buyers.

With the push above 1.3600, the next key resistance point lies closer to the 200-day moving average (blue line) – currently seen @ 1.3733. That gives buyers some room to roam in the meantime.

As for the fundamental outlook, both the Fed and BOE are set to hike rates in the months ahead and it will come down to which central bank blinks first to perceive any material shift in outlook divergence. That considering the market has largely priced in and is anticipating the rate hikes to come already.

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