- The renewed USD sell bias helps GBP / USD gain some traction on Wednesday.
- Lingering uncertainties related to Brexit could limit any significant advance for the pair.
- The focus remains on the news about the pivotal meeting between Johnson and von der Leyen.
The pair GBP/USD moves higher at the start of the European session on Wednesday, rising back above the 1.3400 level. At the time of writing, the pair is holding on to its daily gains in the high zone, around the 1.3420 / 25 region.
The pair has managed to regain some positive traction during the first half of Wednesday’s trading action and has, for now, broken three straight days of declines. The rebound has been supported by the emergence of new sales around the US dollar and it does not appear to be affected by the lingering uncertainties around Brexit.
The positive news on COVID-19 vaccine approvals and efforts to launch more fiscal stimulus to support the US economy have boosted investor confidence. This has been evidenced by a positive sentiment in world stock markets, weighing on demand for the safe haven US dollar and supporting the positive intraday movement of the GBP / USD pair.
On the Brexit front, the Prime Minister of the United Kingdom, Boris Johnson will travel to Brussels for a face-to-face meeting with the President of the European Commission, Ursula von der Leyen, in a last-ditch effort to reach a post-Brexit trade deal. It is worth remembering that significant differences remain on the three key issues: a level playing field, governance and fisheries.
This makes it prudent to wait for a strong continuation buy before confirming that the GBP / USD has formed a solid bottom above the round 1.3200 level. In the absence of major economic releases from either the UK or the US, Brexit news will continue to play a dominant role in influencing the price dynamics of the British pound.
GBP / USD technical levels
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