Brexit optimism is fuelling a significant shift in sentiment for GBPUSD, according to George Davis, Chief Technical Strategist at RBC Capital Markets.

Having broken bullishly above the long-term downtrend earlier this month, Davis says a daily close above resistance at 1.2968 would open up a medium- to long-term target of 1.3185, which is the May 2019 high and also close to the 50% retracement of the 2018 to 2019 bear market (see Chart). After that, the next resistance level at 1.3381 would come into view.

In the short-term, the RSI suggests GBPUSD is overbought though Davis thinks any pullbacks towards 1.2701 and 1.2582 should attract buying interest.

See Chart.