- GBP/USD eases from the fresh high since September 04.
- British Environment Secretary George Eustice sees goodwill for Brexit trade deal.
- UK PM Johnson’s IMB defeat in House of Lords adds to the odds of soft Brexit.
- Market sentiment stays mixed amid US holiday, fewer calls for negative rates.
GBP/USD recedes the upside momentum while declining from the multiday high of 1.3280 to 1.3263, up 0.12% intraday, during the pre-London open trading on Wednesday. The pair recently benefited from the mixed risk sentiment and increasing odds of a soft Brexit. Though, virus woes, an off in the US limit the quote’s short-term moves.
Reuters quote UK diplomat Eustice’s comments on Sky News while citing “some goodwill on both sides to progress things.” The odds could also consider British Prime Minister (PM) Boris Johnson’s defeat in the UK’s upper parliament house to have an upper hand in editing the Brexit treaty via the Internal Market Bill (IMB). Further favoring the Brexit optimism could be the first talks between the UK PM Johnson and US President-elect Joe Biden that highlights the need for a soft stand on Northern Ireland.
Elsewhere, the RBNZ becomes the latest central bank to refrain from negative rates, joining the league of the BOE, RBA, etc. The receding expectations of negative rates join hopes of the coronavirus (COVID-19) vaccine to offer mildly positive markets when the US traders are absent. While portraying the same, stocks in the US stay mildly up but those from the UK remain depressed as the virus woes weigh on the calls of 10 million doses of Pfizer/BioNTech vaccine in 2020 for the British locals.
Although Veterans Day off in the US can keep limiting the Cable’s immediate moves, UK’s NIESR GDP Estimate for three months to October, forecast 2.4% versus 3.3% prior, can offer intermediate moves to the pair after the recent UK employment data pleased GBP/USD buyers. It should also be noted that the on-going Brexit talks in London, coupled with the covid headlines, will act as additional catalysts to watch for the pair traders.
Technical analysis
GBP/SD bulls flirt with short-term rising wedge resistance, at 1.3290 now, amid overbought RSI on the daily chart. The support line of the rising wedge, currently around 1.3195, becomes the key level to watch for the bears.
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