- GBP/USD fades the early-Asian gains, backed by Brexit, lockdown news, which probed September 03 high.
- UK, EU stay optimistic over Brexit despite sticking over key hurdles, chatters concerning easing of virus-led restrictions please the bulls.
- US-China tension, Fed-Treasury tussle and the virus woes probe the buyers.
- November month PMIs, risk catalysts in the spotlight.
GBP/USD consolidates the early-Asian session gains near multi-day high, currently up 0.16% around 1.3314, while heading into the London open on Monday. The Cable rose to the highest in 2.5 months initially as hopes of a soft Brexit, recovery in coronavirus (COVID-19) conditions and vaccine news favored the bulls. However, challenges to the risk-tone, recently coming US-China trade front, join cautious sentiment ahead of the UK’s November month Manufacturing and Services PMIs to probe cool down the seven-day-old uptrend.
News from the UK Times joins The Telegraph’s updates to suggest that Britain and the European Union (EU) are closer to the Brexit deal and will announce the agreement sometime during this week. However, The Guardian quotes the UK’s Chancellor Rishi Sunak to defy the odds while showing the Tory government’s refrain from taking Brexit deal at any costs. On the same line, the UK Times also mentions that the key hurdles, namely fisheries, governance and competition, are yet to overcome.
Also on the positive side were the headlines from The Telegraph suggesting that the UK government will announce easing in activity restrictions ahead of Christmas. As per the latest covid data from Reuters, relying on the official figures, the UK recorded 18,662 new infections on Sunday with 398 deaths within 28 days of a positive test for the virus.
On the other hand, the US signaled the blacklisting of a few more Chinese companies in the latest Sino-American tussle. Elsewhere, The Guardian came out with the COVID-19 updates suggesting that the US suffers one Covid death every minute as global cases near 60 million. Additionally, the US Treasury’s recall of $500 billion from the Federal Reserve also favors the risks of a lack of funds with the American central bank at a time when there is no clarity over the COVID-19 stimulus.
Though, the latest approval of Regeneron’s antibody treatment by the US Food and Drug Administration (FDA) offers a ray of vaccine hopes that also suggest the passage of Pfizer’s vaccine by the UK during this week.
Against this backdrop, stock futures in the US and the UK print mild gains while the Asia-Pacific shares trade mixed, mostly up, by press time.
Looking forward, November’s preliminary readings of UK Manufacturing and Services PMI, expected 50.5 and 42.5 versus 53.7 and 51.4 respective priors, will be the immediate catalyst for the GBP/USD traders to watch. Though, headlines concerning the covid and Brexit will have a higher importance in a case of surprise announcements.
Technical analysis
Sustained trading beyond 1.3315/20 area, including the highs marked since September 03, restricts the immediate upside ahead of highlighting the yearly top surrounding 1.3480/85. On the contrary, 10-day SMA near 1.3240 offers immediate support to watch during the quote’s pullback moves.
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