- GBP/USD remained well supported by the latest Brexit optimism.
- Slightly better UK consumer inflation figures remained supportive.
The GBP/USD pair held on to its modest gains above mid-1.3200s and had a rather muted reaction to the latest UK consumer inflation figures.
According to the data released by the UK Office for National Statistics, the headline CPI remained flat in October as compared to consensus estimates pointing to a 0.1% fall. Adding to this, the yearly rate and core CPI also came in better-than-expected.
Against the back of a possible Brexit deal by the beginning of next week, the data continued underpinning the British pound. This comes amid a mildly softer tone surrounding the US dollar, which extended some additional support to the GBP/USD pair.
A promising development in late-stage COVID-19 vaccine trials dented the greenback’s relative safe-haven status. This, along with concerns about the economic fallout from new coronavirus restrictions in several US states kept the USD bulls on the defensive.
Despite the supporting factors, the GBP/USD pair lacked any strong follow-through as investors await Brexit updates before placing fresh bullish bets. It is worth reporting that negotiators are yet to find a compromise on key sticking points, including fisheries.
Market participants now look forward to the US housing market data – Building Permits and Housing Starts – for some impetus. This, along with developments surrounding the coronavirus saga – will influence the USD price dynamics and produce some trading opportunities.
Technical levels to watch
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