- GBP / USD regains lost ground to hit levels before 1.3300.
- Upbeat comments from Brexit negotiators boost the pound.
- GBP / USD is likely to extend above 1.3280 – UOB.
The pound traded higher on Friday, extending its bounce from Thursday’s lows at 1.3195 to session highs a few pips below 1.3300, where the bulls have lost steam. The pair, however, remains stable above 1.3260.
Libra advances in hopes of a Brexit deal
The pound has gained around 0.25% so far on Friday, fueled by a more optimistic view on the outcome of the Brexit negotiations. European Commission President Ursula van der Leyden boosted market sentiment today, stating that she has seen “better progress” in recent days, with more movement in “important files”.
Van der Leyden’s comments have been confirmed by comments from British and EU representatives, suggesting that positions are getting closer and that the deal could be imminent.
On the macroeconomic front, UK retail sales have shown a 1.2% monthly increase and 5.8% YoY growth in October. This is the sixth consecutive increase in retail consumption, demonstrating the resilience of the sector in times of coronavirus and has contributed to increasing confidence in the GBP.
GBP / USD is likely to rise beyond 1.3280 – UOB
The UOB currency analysis team sees the pound skewed to the upside with room for a further rally beyond 1.3280: “GBP” has to move and sustain above 1.3380 within this 1 or 2 days or a break of 1.3160 (No change in the level of) would indicate that the GBP is not ready to move above 1.3322 ‘. Subsequently, the British pound fell to 1.3198 before rebounding strongly to end the day little changed at 1.3265 (-0.02%). The bullish momentum continues to wane and unless the GBP can hold above 1.3280 in these 1-2 days, the prospect of a move above 1.3322 would diminish rapidly. ”