- GBP/USD probes intraday high, rises for the second consecutive day.
- US dollar weakness amid hesitant progress on stimulus paycheck, virus woes please Cable buyers.
- The brexit deal reportedly has a smooth run through the Parliament.
- UK PM Johnson expands Tier-4 activity restrictions amid record jump in covid cases.
GBP/USD takes the bids near 1.3552, up 0.42% intraday, while heading into Wednesday’s London open. The Cable recently benefited from the US dollar weakness amid hopes of the coronavirus (COVID-19) stimulus and a fresh case of the covid variant in Colorado. Also favoring the bulls could be the hopes that the Brexit deal will have smooth sailing through the UK Parliament where it will be voted today. Though, virus woes at home keep Cable buyers cautious.
Earlier in Asia, Reuters came out with the excerpts of PM Boris Johnson’s speech, released by his office wherein the national leader highlights the nation’s trade freedom but pays a little heed to the service sector that didn’t gain any major positives in the Brexit deal. As the UK policymakers are up for voting on the key deal, recently agreed with the European Union, the opposition has already shown its support and hence proved positive for the GBP/USD. Even so, diplomats will be busy throughout the day starting from 09:30 AM to nearly 11:00 PM before they unveil the final decision.
Other than his comments over the Brexit deal, UK PM Johnson’s announcement to extend Tier 04 restrictions on some more areas in Britain also gained market attention. “Ministers were considering imposing the toughest measures on parts of southwest England and Cumbria, where the variant appears to be gaining ground even though cases remain relatively low, said the report. The Telegraph reported on Monday that Midlands and the North region in England are expected to be put into Tier 4. Health Minister Matt Hancock will give an update on regional coronavirus restrictions on Wednesday.” per Reuters.
On other hand, US Congress members struggle to roll out $2,000 paychecks after Senate Majority Republican Leader Mitch McConnell showed readiness to block the payments earlier in the day. Though, the policymaker afterward put forward the bill, as a part of the procedure, while also adding about social media companies’ protections and election fraud studies afterward.
Against this backdrop, the US dollar index (DXY) drops to a fresh low since April 2018 while stock futures in the US and the UK remain positive.
Looking forward, GBP/USD buyers want to hear a smooth passage of the Brexit deal and the US aid payment while further worsening of the virus conditions in America and Britain can challenge the run-up.
Technical analysis
Considering upbeat RSI conditions, as well as successful trading above 21-day SMA and an upward sloping trend line from November 02, respectively around 1.3435 and 1.3155, GBP/USD bulls are set to challenge the monthly peak surrounding 1.3620.
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