- Pound remains strong across the board amid Brexit deal expectations.
- GBP/USD holds firm above 1.2900, limited by 1.2950.
The GBP/USD is moving sideways between the areas of 1.2890 and 1.2950. It is holding onto a weekly gain of more than 200 pips. The pound has been the top performer among the G10 space over the last five days supported by expectations about a Brexit deal.
On Friday, Cable continues to trade sideways even after the release of the US employment report. Jobs numbers came in below expectations showing the recovery in labor market continues to slow.
The pound continues to be supported by positive expectations about a deal between the United Kingdom and the European Union on Brexit. The deadline is closer but UK officials seem now more chances of a deal.
“We see some way to go yet to reaching an EU-UK trade deal but as long talks continue the markets are likely to assume the best and that should provide GBP support next week. August GDP should also help, but the economic outlook remains a downside risk significant headwinds on the horizon limiting GBP upside”, explained analyst at MUFG Bank.
In the US, attention will likely set on the White House after US President Trump tested positive for COVID-19 and also as weaker data increases the pressure on lawmakers for new fiscal stimulus.
From a technical perspective, GBP/USD rebounded after finding resistance at a key weekly support area near 1.2740. The mentioned area contains the 20, 55 and 100-weekly moving averages. A weekly close clearly below that area would deteriorate the technical outlook for the pound significantly.
Technical levels
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