GBP/USD taking advantage of a softer US dollar and slight risk-on tones. Brexit, however, is a weight for the forthcoming weeks towards the June 30 deadline. GBP/USD is currently trading at 1.2192 and slightly higher at the start of the week. Investors remain bullish on the relaxation of lockdown measures which has given equities a lift and dented the US dollar. GBP/USD subsequently climbed from a low of 1.2163 to a high of 1.2203. The US dollar initially climbed at the start of the Asian session but came under pressure as the risk-on theme build-up. European equities ended higher with the E-minis up 1.0%. The DAX climbed to its highest level since 6 March as the German government is reportedly nearing a €9 billion bailout of Lufthansa. Data was positive as well, with the Germany May Ifo business climate index arriving at 79.5 vs 78.5 expected. US futures were also up 1%. However, currencies have been lacklustre with it being both a holiday in the UK and US. The dollar started to tail off from the 99.98 highs enabling GBP to extend its correction in a minor way. Traders will be keeping an eye on a number of developments. The US dollar will be tied to mounting US-China tensions with the 100-mark in focus. Near-term dollar positioning will also be expected to to be tied largely to incoming data and whether there will be renewed COVID-19 outbreaks. Plenty of downside risks to GBP these next few weeks As for GBP, it is a very quiet week on the UK data front. There have been some air punched out of sterling in recent times owing the rhetoric from the Bank of England, advocating for interest rates to start turning negative by the year-end. However, this is likely priced in at this juncture. Instead, news flows relating to the UK-EU trade negotiations are anticipated to remain negative for GBP and will likely have more of a knee jerk impact as the come in. A hard-Brexit is on the cards if there are no extension agreements of the UK-EU transition period. The deadline is coming up next month. Calls have mounted for the transition period to be extended as a result of the pandemic, a decision that would have to be made by June 30. However, Prime Minister Boris Johnson and the UK negotiating team have so far been unequivocal. The PM Johnson had articulated the Brexit deal with a clear timeline and will not make any compromise or bow to pressure for any extension. Consequently, the upcoming weeks hold plenty of downside risks to GBP. “Transition ends on 31 December this year,” David Frost tweeted on April 16. “We will not ask to extend it. If the EU asks, we will say no.” GBP/USD levels Analysts at Commerzbank explained that “GBP/USD’s bounce last week failed to make an impression on the 55-day ma and will remain directly offered while capped by it at 1.2297.” Attention is still on the 50% retracement of the March-to-April advance at 1.2030 below which lies the minor psychological 1.2000 mark. Further down sit the September low at 1.1958 and the March 20 high at 1.1935. A drop below there is needed to refocus attention on 1.1491, the 2016 low, and also on the March low at 1.1409. Fibonacci support en route is found at 1.1883 and at 1.1675. FX Street FX Street FXStreet is the leading independent portal dedicated to the Foreign Exchange (Forex) market. It was launched in 2000 and the portal has always been proud of their unyielding commitment to provide objective and unbiased information, to enable their users to take better and more confident decisions. View All Post By FX Street FXStreet News share Read Next USD/JPY looks to end day near 107.70 with small gains FX Street 3 years GBP/USD taking advantage of a softer US dollar and slight risk-on tones. Brexit, however, is a weight for the forthcoming weeks towards the June 30 deadline. GBP/USD is currently trading at 1.2192 and slightly higher at the start of the week. Investors remain bullish on the relaxation of lockdown measures which has given equities a lift and dented the US dollar. GBP/USD subsequently climbed from a low of 1.2163 to a high of 1.2203. The US dollar initially climbed at the start of the Asian session but came under pressure as the risk-on theme build-up. 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