- GBP / USD remains at four-day highs as the US dollar loses ground.
- The appetite for risk overshadows the disappointing Brexit developments.
- The focus of attention remains on Covid statistics amid a light economic calendar.
The GBP / USD looks to extend its bullish momentum above the 1.3200 level at the start of the European session on Monday, helped by the general weakness of the US dollar against its main competitors driven by market optimism. At the time of writing, the pair remains positive around the 1.3220 level.
Demand for the US dollar has weakened, as euphoria over the progress of a coronavirus vaccine, strong production from Chinese factories and the Japanese economic rebound they have propelled Asian stock markets to record levels. The feeling of appetite for risk has partly offset concerns about virus cases and US restrictions.
Meanwhile, the higher-yielding British pound has taken advantage of the surge in risk appetite, ignoring the latest negative developments around Brexitas negotiations on a potential UK-EU trade deal are likely to extend beyond this week.
Over the weekend, Irish Foreign Minister Simon Coveney noted: “if the UK imposes an internal market bill, we won’t get the dealMeanwhile, UK Environment Secretary George Eustice said “there is an agreement” between the two sides, keeping hopes alive, while disputes over fisheries and state aid persist.
Markets will closely follow global coronavirus statistics and Brexit updates amid a light economic calendar on both sides of the Atlantic. Although risk trends are likely to remain the key market driver.
GBP / USD technical levels
“Last week’s high of 1.3313 is the level to beat for the bulls. A move above that level would negate the bullish fatigue signaled by the long upper wick attached to the previous week’s candle and would open the doors at 1.3483. On the other hand, a move below the Asian session low of 1.3174 would validate the bullish fatigue signaled by the weekly candle and shift the risk in favor of a drop to 1.3108 (5-week SMA), ”explains Omkar Godbole, FXStreet analyst.
.
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.
