- GBP / USD manages to regain some positive traction on the last trading day of the week.
- The modest intraday rally does not appear to be affected by the incoming Brexit news.
- Optimism around the COVID-19 vaccine weighs on the safe-haven USD and supports the pair’s rise.
The pair GBP/USD maintains its modest intraday gains during the European session on Friday and is trading near the upper end of its daily range, around the region of 1.3370.
Following good price movements in both directions the day before, the pair has captured some new purchases on the last day of the week and does not appear to be affected by the uncertainties around Brexit. In the latest Brexit-related news, the EU’s main Brexit negotiator, Michel Barnier, has told envoys that he cannot say if an agreement is possible at this time..
It is worth reporting that both parties have yet to reach a compromise on the key points: the so-called level playing field, fisheries and state aid rules. Investors, however, remain optimistic about the possibility of a last minute Brexit, which in turn has supported the British pound and has offered some support to the GBP / USD pair.
On the other hand, US dollar remains under pressure amid COVID-19 progress and hopes for more fiscal stimulus from the incoming Biden administration. This, coupled with falling US Treasury yields, has put some additional pressure on the US dollar and continued to support the buying tone around the GBP / USD pair.
That being said, the recent in-range price action seen in recent days warrants some caution before investors start positioning themselves for any big moves in either direction. However, a sustained strength above the 1.3400 level will be seen as a new trigger for the bulls and it will pave the way for additional short-term earnings.
There is no major economic data release on Friday, neither from the UK nor from the US Investors will therefore be closely monitoring incoming news related to Brexit. Apart from this, the broader market risk sentiment will influence the USD price dynamics and could generate some short term trading opportunities around the GBP / USD pair.
GBP / USD technical levels
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