GBP price, Brexit news and analysis:
- Optimism is growing in the markets that an EU-UK trade deal, albeit a minimal one, can be agreed before the Brexit transition period ends on December 31.
- That is boosting GBP/USD, which could hit the September 1 high at 1.3483 if resistance at the 1.34 “round number” can be overcome.
GBP/USD higher on Brexit trade deal hopes
Optimism that European Commission President Ursula von der Leyen and UK Prime Minister Boris Johnson can push through an EU-UK trade deal before the Brexit implementation period ends on December 31 is boosting Sterling even though only a bare-bones agreement is expected.
That will likely push GBP/USD above the 1.34 level, where “round number” resistance halted its progress Monday, when the day’s high was at 1.3398. A sustained breach of 1.34 would then likely see the price rise towards the 1.3483 level touched on September 1 before the exchange rate fell back.
GBP/USD Price Chart, Daily Timeframe (August 25 – November 24, 2020)
Chart by IG (You can click on it for a larger image)
As the chart above shows, GBP/USD remains within the rising channel in place since the September 23 low at 1.2675.
Much though will depend on the positive mood in the markets generally continuing. For now, sentiment is constructive after US President Donald Trump cleared the way for a Joe Biden presidency, vaccine hopes persist and Monday’s UK purchasing managers’ indexes for November beat expectations.
Looking ahead, Wednesday’s spending review by UK Chancellor of the Exchequer Rishi Sunak and the accompanying economic and fiscal forecasts are the next major events on the calendar but should have little impact on GBP/USD and the GBP crosses.
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| Change in | Longs | Shorts | OI |
| Daily | 1% | 7% | 4% |
| Weekly | -15% | 20% | 2% |
--- Written by Martin Essex, Analyst
Feel free to contact me on Twitter @MartinSEssex
