- GBP / USD had good price swings in two directions on Friday amid a flurry of Brexit headlines.
- An EU official reportedly said a deal is imminent and is expected by the weekend.
- A softer tone around the USD continued to act supportive ahead of the US jobs report.
After some intraday volatility during the first half of European trading action, the pair GBP/USD it now appears to have stabilized around the 1.3475 region.
In recent Brexit-related developments, French Secretary for European Youth Affairs Clément Beaune said there is a risk that there will be no Brexit deal and they will veto any deal deemed unsatisfactory. This, in turn, put some downward pressure and dragged the pair to an intraday low of 1.3410.
The drop, however, turned out to be short-lived and was quickly accepted after an EU official reportedly said a trade deal with the UK is imminent and is expected for the weekend. The GBP / USD pair rallied around 80-85 pips in reaction to the headlines and was supported by a softer tone around the US dollar.
The USD index languished near a two-and-a-half-year low amid optimism about the launch of a COVID-19 vaccine, raising the stakes for a new U.S. coronavirus relief package and monetary easing of the Fed. The decline remained limited, at least for now, as investors steered clear ahead of the monthly US employment report.
Meanwhile, British Prime Minister Boris Johnson’s spokesman said on Friday that it would not be possible to reach an agreement with the EU if it did not respect the UK’s fundamental principle of regaining control. This appeared to be the only factor that kept further gains in check and kept GBP / USD below the key psychological mark of 1.3500.
With less than four weeks to go before the Brexit transition period ends on December 31, traders are likely to wait for further Brexit updates before making directional bets. Meanwhile, US job details, popularly known as NFP, some short-term business opportunities will be considered on the last day of the week.
Technical levels
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