The market is starting to position itself for Boris Johnson to announce an extension of trade talks with the EU later today, and more so now following Dominic Raab's comments that "there is a chance" for a Brexit deal and that they are "close" to one.
That is a sort of giveaway to what Johnson will spell out later today but then again, you can't really rule out the potential for a surprise. In that lieu, the risks are sort of skewed to the downside as to what Johnson might announce when the time comes.
GBP/USD has made its way back above 1.2900 and above the 23.6 retracement level of the swing move lower yesterday. Further minor resistance is seen closer to 1.2950 next but the 200-hour MA (blue line) @ 1.2965 will offer more of a challenge for buyers.
Just above that is the 100-hour MA (red line) @ 1.2984 and those key near-term levels will be ones to watch in case we see any upside move before getting to 1.3000.
Boris Johnson extending talks may offer a glimmer of hope but it comes at a time when talks are pretty much sitting on a knife's edge. We're no closer to a deal than we were at the start of the year and with Brexit, nothing is agreed until everything is agreed.
I would argue if the pound is to rally on Johnson's bullishness as he extends the "deadline" - whatever that actually means in Brexit world - that any gains may be short-lived.
For now, as the pound is creeping higher, just be mindful in case the market tries to front-run the news further and turn this into a 'buy the rumour, sell the fact' event.