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  • GBP/USD saw a “sell the fact” reaction to confirmation that a Brexit deal had been reached.
  • Trade is set to die down in the coming hours amid early Christmas Eve market closures.

News recently broke that the EU and UK have reached a Brexit deal. Given that, by this point, such an outcome was expected and had already been priced in by markets, GBP has seen a “sell the fact” reaction. As EU Commission President von der Leyen and EU Brexit Negotiator Michelle Barnier deliver a press conference, GBP/USD has slipped back from previous daily highs above the 1.3600 level to set lows beneath 1.3550. The pair is currently trading in the 1.3560s, but still holds onto gains of around 0.5% or 70 pips on the day.

Trade is likely to significantly die down in the hours ahead, with European market participants having already left for Christmas Eve celebrations and US participants soon to follow.

GBP/USD drops below short-term uptrend

GBP/USD has dropped below a short-term uptrend that had lifted the pair from 1.3300 to 1.3600 in recent days. A potential move lower towards support around 1.3500 is on the cards, though a larger sell-off seems unlikely in the context of a deal having been officially reached, aside from if the move to the south is driven by USD strength.