GBP / USD Posts New Highs Near 1.3100, Three-Day Negative Streak Ends

• Libra among the best in Europe, on a calm day for the markets
• The pound remains supported by the 20-day moving average.

The GBP/USD it is rising on Tuesday after falling for the previous three trading days. During the US session, it posted a new daily high at 1.3078 and then modestly retraced, staying above 1.3060.

The US dollar is posting modest losses across the board affected by a drop in US yields and cannot benefit from better than expected US economic data. On Wall Street, stocks are mixed. The resurgence of COVID-19 cases is creating concerns among market participants.

With no Brexit headlines, the pound performed better in Europe. The coin continues to be fueled by negative rate speculation from the Bank of England, COVID-19 cases and Brexit. “We are increasingly confident that the increase in the pound stemming from the confirmation of a Brexit deal is likely to be modest. Yesterday was a good example of some good news that failed to give the GBP much momentum. Michel Barnier’s decision to stay in London negotiations until tomorrow was seen as a positive signal by the UK government, but it failed to register on the currency markets, ”explained MUFG Bank analysts.

Levels to watch

The correction from levels close to 1.3200 for GBP / USD found support above the 20-day moving average at 1.2980. A daily close clearly below would suggest further losses ahead with the next strong support seen at 1.2860 followed by the October low at 1.2815.

On the upside, 1.3080 is again a resistance level to consider, followed by the strong 1.3150 barrier; a close above would point to more strength to come for the pound.