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  • Renewed USD selling bias assisted GBP/USD to gain some traction on Wednesday.
  • Persistent Brexit-related uncertainties might keep a lid on any meaningful move up.
  • Focus remains on headlines coming out of pivotal Johnson-von der Leyen meeting.

The GBP/USD pair maintained its bid tone through the early European session and was last seen hovering just below daily tops, around the 1.3380 region.

The pair managed to regain some positive traction during the first half of the trading action on Wednesday and for now, has snapped three consecutive days of the losing streak. The uptick was supported by the emergence of some fresh selling around the US dollar and seemed rather unaffected by persistent Brexit uncertainties.

Positive news on COVID-19 vaccine approvals and efforts to launch more fiscal stimulus to support the US economy boosted investors’ confidence. This was evident from a positive trading sentiment across the global equity markets, which snapped demand for the traditional safe-haven greenback and remained supportive of the intraday positive move.

On the Brexit front, the UK Prime Minister Boris Johnson will travel to Brussels for a face-to-face meeting with European Commission President Ursula von der Leyen in a last-ditch effort to strike a post-Brexit trade deal. It is worth recalling that significant differences remain on the three key issues – level playing field, governance and fisheries.

This makes it prudent to wait for some strong follow-through buying before confirming that the GBP/USD pair has formed a strong base ahead of the 1.3200 mark. In the absence of any major market-moving economic releases, either from the UK or the US, the incoming Brexit headlines will continue to play a dominant role in influencing the GBP price dynamics.

Technical levels to watch