- GBP / USD is stable at two-month highs near 1.3200.
- The pound, backed by market hopes for a COVID-19 vaccine.
- A clear break to 1.3174 / 84 could send the British pound towards 1.3247 – Credit Suisse.
The pound sterling has held steady near two-month highs, fueled by market optimism about a coronavirus vaccine and Biden’s victory in the US election. The pair has not been able to break the 1.3200 level so far, although downside attempts have been contained above 1.3120.
GBP Strengthens on Hopes for a COVID-19 Vaccine
The pound was up about 0.5% earlier today after pharmaceutical company Pfizer announced that the first tests of its coronavirus vaccine show a 90% effectiveness, a much better than expected success rate. This news has boosted market sentiment, sending stocks higher around the world and pushing the pair to test new two-month highs at 1.3200.
Beyond that, Biden’s victory in the US presidential election has helped boost investor confidence. The market anticipates a more pro-commercial approach to international relations, while in the United States, the odds of a fiscal stimulus deal have risen substantially.
On the downside, the lack of progress on a post-Brexit deal, after two weeks of intense negotiations, is weighing on the British pound. EU and UK representatives are expected to resume talks in London this week, however, with the deadline to leave the EU on December 31, the possibility of a hostile exit grows by the day.
GBP / USD: Above 1.3174 / 84 could point towards 1.3247 – Credit Suisse
From a technical perspective, Credit Suisse’s currency analysis team sees the pair as targeting 1.3247 on a clear breakout of 1.3174 / 84: “GBP / USD has extended its defense of key price support at 1.2863 / 46 to complete. a ‘outside bullish week’ and with the market back above its 13 and 55 day averages, we see a clear break above resistance at 1.3174 / 84, the October high and the 61.8% retracement of the decline in September / October, for a challenge in the ‘neckline’ to the August high, currently at 1.3247 “.
Technical levels
GBP/USD
| Panorama | |
|---|---|
| Today’s Last Price | 1.3124 |
| Today’s Daily Change | -0.0029 |
| Today’s Daily Change% | -0.22 |
| Today’s Daily Opening | 1.3153 |
| Trends | |
|---|---|
| SMA of 20 Daily | 1.3008 |
| SMA of 50 Daily | 1.2983 |
| SMA of 100 Daily | 1.2903 |
| 200 SMA Daily | 1.2707 |
| Levels | |
|---|---|
| Daily Previous Maximum | 1.3177 |
| Daily Previous Minimum | 1.3092 |
| Weekly Preview Maximum | 1.3177 |
| Weekly Prior Minimum | 1.2854 |
| Monthly Previous Maximum | 1.3177 |
| Minimum Previous Monthly | 1.282 |
| Daily Fibonacci 38.2% | 1.3145 |
| Fibonacci Daily 61.8% | 1.3125 |
| Daily Pivot Point S1 | 1.3105 |
| Daily Pivot Point S2 | 1.3056 |
| Daily Pivot Point S3 | 1.302 |
| Daily Pivot Point R1 | 1.3189 |
| Daily Pivot Point R2 | 1.3225 |
| Daily Pivot Point R3 | 1.3274 |
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Credits: Forex Street
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