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  • GBP/USD trims the biggest losses in one week as buyers battle intraday high near 1.3500.
  • Britain registers record high COVID-19 cases, study suggests the need to vaccinate two million a week to prevent a third wave.
  • UK-Spain talks progress over Gibraltar border, British businesses asked to prepare for a smooth exit.
  • US House passes covid aid paycheck, Senate moves become the key.

GBP/USD eases from intraday high to 1.3483, up 0.33% on a day, while heading into the London open on Tuesday. In doing so, the cable buyers cheer broad US dollar weakness amid a risk-on mood, coupled with optimism over Brexit, while paying a little heed to the coronavirus (COVID-19) conditions at home. Although the holiday season restricts market data/events, Brexit headlines will join updates from the US Senate to determine near-term sterling moves.

During the London-Madrid Brexit talks over Gibraltar, policymakers inch closer to an agreement over the free movement of the nation’s workers while also discussing police checks for others. Although all of the European Union (EU) members have backed the Brexit deal with the UK, policymakers in London are yet to pass the deal and are yet jostling over the final details of the already agreed bill with the bloc.

Elsewhere, Britain reported 41,385 new COVID-19 cases on Monday, a daily record, per Reuters. “There were 357 new deaths within 28 days of a positive test, the government’s coronavirus statistics portal said,” the news said further. Amid surging virus cases, the London School of Hygiene and Tropical Medicine (LSHTM) concludes, per Reuters, that Britain must vaccinate two million people a week to avoid a third wave of the coronavirus outbreak.

Even so, GBP/USD bulls cheer the US House passage of a bill favoring $2,000 paycheck while also ignoring American President Donald Trump’s veto over the defense bill.

Against this backdrop, stock futures in the UK and the US remain upbeat while those from Asia-Pacific follow the suit by press time.

Looking forward, updates concerning Brexit and the COVID-19 will be the key for the cable traders. However, the US Senate’s reaction to the House passage of covid aid package bills is set to grab the headlines. Should the policymakers fail to stop the heavy stimulus, US dollar weakness may continue favoring the GBP/USD bulls.

Technical analysis

Although corrective pullback from 21-day SMA favors GBP/USD buyers targeting the 1.3500 round-figure, 1.3570 and the 1.3600 threshold can challenge any extra north-run.