GBP/USD: through the roof to 1.2470 highs

Currently, GBP/USD is trading at 1.2460, up 0.35% on the day, having posted a daily high at 1.2470 and low at 1.2360.

GBP/USD remains bid, rallying from 1.2380 to aforementioned highs. We now await the FOMC minutes as a catalyst, but, Don't believe the hype, and get real: the Fed will not hike in December and here is why ...

Chancellor Philip Hammond delivered an Autumn Budget Statement earlier that highlights the damage that Brexit will likely cause. The Office for Budget Responsibility’s forecasts and the Chancellor, formally show that the UK will experience significantly slower growth, higher inflation, lower tax receipts and higher borrowing.

"This means that we see the potential for lower tax revenues and higher index linked government spending. As such, we think that the borrowing numbers are likely to be higher than the OBR predicts," explained 

James Knightley, analysts at ING, adding, "Therefore, we see a real risk that these new rules, much like Gordon Brown’s Golden Rule and George Osborne’s fiscal rules, will be missed."

GBP/USD still vulnerable

"GBP remains vulnerable in this environment and continues to trade erratically with a series of flash-style moves since the early October crash. Hawkish BoE member Forbes has downplayed concerns about uncertainty and underscored its relatively muted impact on growth. Yield spreads are showing signs of stabilization around extended levels and risk reversals suggest a grinding moderation in the premium for protection against GBP weakness," explained analysts at Scotiabank.

GBP/USD levels

Current price is 1.2460, with resistance ahead at 1.2470 (Daily High), 1.2493 (Daily Classic R1), 1.2494 (Weekly High), 1.2515 (Yesterday's High) and 1.2534 (Weekly Classic R1). Next support to the downside can be found at 1.2454 (Hourly 200 SMA), 1.2439 (Daily Classic PP), 1.2426 (Daily 20 SMA), 1.2418 (Weekly Classic PP) and 1.2417 (Daily Open).