The pound's spike don't look like it has the makings of a sustained rally just yet
Price is now trading back to 1.2930 levels after hitting a high of 1.2958 and failing to breach the 200-hour MA. While I'm not entirely certain if it's related to the recent commentary in the post here, what's certain is that the spike here is largely driven by a high volume transaction.
And as mentioned earlier, I want to be bullish on the pound (I really, really do) on the back of positive Brexit developments but this really doesn't have anything in it to see a real move higher.
In most cases where volume spikes up, they tend to fade away and that's likely what we're seeing now. I can't be sure of what's the reason for the surge in volume - it could be something as simple as a large client order or even just real money deciding to be more bullish on the story above - but it is what it is.
As for price action moving forward, I wouldn't be too fussed about the move higher. We all have to accept that this comes as part and parcel of trading markets.
My earlier short at the start of the morning was stopped out as a result. And it would've been back in the money now. But hey, that's trading for you. Shrug it off and move on I guess. :)
Update: And as I type this out, price has fallen back to hit near 1.2900 levels currently.
