British Pound (GBP) Latest - Post-Brexit Trade and Covid-19 Vaccine Talks Supporting Sterling
EU/UK Trade, Vaccine Talks and GBP/USD Price, Analysis and Chart:
- Chief EU-UK trade negotiators will speak today.
- Covid-19 vaccine already being produced.
- IG client sentiment is mixed.
UK chief negotiator Lord Frost will speak with his EU counterpart today over the phone, and not face-to-face as originally planned after PM Boris Johnson appeared to have pulled the plug on negotiations last Friday. The UK PM said at the end of last week that insufficient progress had been made in the talks and that the country should ready itself to leave without a deal, although talks could continue if there was ‘some fundamental change of approach’. Sterling continues to trade as if a basic deal will be struck with cable trading back towards 1.3000 again.
There may be a Covid-19 vaccine available in the UK by the end of the year if recent media reports are correct. The pharmaceutical giant is said to already be producing its vaccine and storing it in Belgium and up to 40 million doses may be available for the UK by the end of the year, despite it not yet being officially sanctioned. Another vaccine, produced by Astra Zeneca and Oxford University, is also said to be close to being rolled out, according to a report in the Daily Telegraph.
GBP/USD is picking up on the mildly positive news in early trade and trades around 1.2960. The 20-day simple moving average continues to act as support for the pair with the 50-dma at just under 1.3000 the next level of resistance. Above here, a break and close above 1.3084 would see the pair turning further positive.
GBP/USD Daily Price Chart (March – October 19, 2020)
IG client sentiment data shows 44.98% of traders are net-long with the ratio of traders short to long at 1.22 to 1.The number of traders net-long is 1.39% higher than yesterday and 13.21% higher from last week, while the number of traders net-short is 4.76% higher than yesterday and 11.48% lower from last week.We typically take a contrarian view to crowd sentiment, and the fact traders are net-short suggests GBP/USD prices may continue to rise.
Positioning is more net-short than yesterday but less net-short from last week. The combination of current sentiment and recent changes gives us a further mixed GBP/USD trading bias.
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