GBP/USD: Brexit deal likely at weekend, dips an appealing chance to buy

GBP/USD has fallen off the highs as Brexit talks hit a fresh impasse. There are reasons to be optimistic that a deal may be struck over the weekend, therefore, buying the dip looks tempting, according to FXStreet’s Analyst Yohay Elam.

Key quotes

“The fish fight provides two reasons to be optimistic. First, it means the other thorny issues are mostly resolved and perhaps await a resolution on fisheries to cross the t’s and dot the i’s. Secondly, the industry is small. With governments pouring enormous funds this year on everything related to the coronavirus crisis, they can also throw money at this problem. It seems too minuscule to prevent a much more lucrative deal involving other topics.”

“US fiscal stimulus talks are down to the last details and both sides remain optimistic despite failing to meet expectations for an accord on Thursday. An FDA committee gave its nod to Moderna’s vaccine, opening the door to a final authorization late on Friday.”

“A major hack into federal agencies – potentially by Russian actors – seems severe and is weighing on sentiment. Coronavirus continues raging in the US where deaths, hospitalizations and cases break records every day. In the UK, well over half the population is under Tier 3 restrictions.”

“Profit-taking ahead of the weekend and the Christmas holiday is also in play, weighing on sentiment.” 

“Resistance awaits at 1.3550, the daily high and a peak earlier this week. The new 2020 high of 1.3622 is critical resistance. Support awaits at the daily low of 1.3490, followed by 1.3450, a stepping stone on the way up and by 1.34.”