GBP/USD eases towards 1.3300 amid no-deal Brexit fears

• GBP/USD trims intraday gains while easing from 1.3324.
• UK PM Johnson cites a “strong possibility” of no-deal Brexit.
• Brexit updates from Brussels, US data and stimulus news will be the key.

GBP/USD recedes to 1.3310 while heading into the London open on Friday. In doing so, the Cable consolidates the heaviest losses in over a month. Although the US dollar weakness keeps the pair buyers hopeful, recent pessimism concerning Brexit highlights fears of a no-deal Brexit and can weigh on the quote.

UK PM Boris Johnson’s clear statement on increased odds of a no-deal Brexit, coupled with a push towards the contingency planning, weighed down the quote on Thursday even as the US dollar index (DXY) snapped a four-day winning streak. The greenback gauge currently extends the previous day’s losses, down 0.13% intraday, but fears of a haphazard divorce of the ex-neighbors weigh on the quote.

The European Union (EU) President Ursula von der Leyen was to update on the future of Brexit discussions by this Sunday. However, nothing has been rolled out, which may be due to the ongoing EU summit, in recent days. While concerns are almost clear that the trade negotiations are heading towards a bitter end, the UK’s PM Johnson’s aim of having the Australia-style linkages with the EU can be looked for an intermediate relief.

Elsewhere, the risk tone remains mildly bid as the coronavirus (COVID-19) vaccine from Pfizer-BioNTech gets the go from a panel of experts that helps the US Food and Drug Administration (FDA). Even so, the record-high death toll and virus infection in the US combat the uncertainty over the American covid aid package challenge the bulls.

Looking forward, risk catalysts will be the only driver ahead of the US session when the Michigan Consumer Sentiment Index for December will be eyed. In any case, Brexit headlines remain the key.

Read: US Michigan Consumer Sentiment December Preview: For once consumer attitudes may not matter

Technical analysis

The first daily closing below 21-day SMA since early November, amid bearish MACD signals, directs GBP/USD sellers towards the October high near 1.3175 with the weekly bottom near 1.3225 acting as immediate support. On the contrary, an upside break of 21-day SMA, currently around 1.3335, can’t convince the GBP/USD bulls as an ascending trend line from October 21, near 1.3510, becomes a tough nut to crack.