- GBP / USD continues to move higher for the fourth day in a row on Wednesday.
- The British pound strengthens on hopes of a possible last-minute Brexit deal.
- Nervousness about COVID-19 weighs on the USD and continues to support the positive movement of the pair.
The pair GBP / USD has risen to new one-week highs during the European session on Wednesday, with the bulls targeting a move to regain the round 1.3300 level. At the time of writing, the pair remains close to the daily highs around the 1.3285 region.
A combination of supporting factors has helped the pair to take advantage of last week’s bounce from the 1.3100 level and gain traction for the fourth day in a row. Concerns about possible economic consequences of the new COVID-19 restrictions in several US states have weighed on the latest optimism around promising vaccines. This, coupled with the current drop in U.S. Treasury yields, has kept the US dollar bulls on the defensive during the first half of trading action on Thursday.
On the other hand, sterling remains supported by hopes that the UK and the European Union can reach a Brexit deal early next week. Furthermore, the mostly upbeat UK consumer inflation figures have provided additional boost to the GBP / USD pair and support the pair’s upward move. However, the fact that traders have not yet reached a compromise on key points such as fishing has prevented GBP bulls from opening aggressive positions, which could limit the rally.
It is worth reporting that, according to the news, EU negotiators must update envoys from the bloc’s 27 member states on the status of trade talks with Britain at 07:00 GMT on Friday. This makes it prudent to wait for some solid continuation buying, possibly above the 1.3310-15 region, before positioning for an extension of the recent bullish move.
Market participants are now awaiting the US economic calendar, which features the releases of building permits and home starts, for fresh momentum at the start of the American session. The data, along with developments around the coronavirus saga and broader market risk sentiment, will influence USD price dynamics and could generate some short-term trading opportunities around the GBP / USD pair.
GBP / USD technical levels
.
Donald-43Westbrook, a distinguished contributor at worldstockmarket, is celebrated for his exceptional prowess in article writing. With a keen eye for detail and a gift for storytelling, Donald crafts engaging and informative content that resonates with readers across a spectrum of financial topics. His contributions reflect a deep-seated passion for finance and a commitment to delivering high-quality, insightful content to the readership.
