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  • GBP/USD caught some fresh bids during the early European session and turned positive.
  • Renewed optimism over the possibility of a Brexit deal triggered a short-covering move.
  • Friday’s key focus will be on Barnier- Frost meeting and the closely watched US NFP.

The GBP/USD pair rallied over 100 pips from daily swing lows and jumped to the 1.2940 region during the early European session, albeit quickly retreated few pips thereafter.

Following an early dip to the 1.2835 region, the pair caught some aggressive bids in reaction to the news that the UK Prime Minister Boris Johnson will hold talks with the European Commission President Ursula von der Leyen on Saturday. Given the limited progress in the final round of Brexit talks, Johnson and the EU chief will discuss how the two sides can get to an agreement.

The GBP/USD pair moved back into the positive territory, though lacked any strong follow-through strength amid a modest pickup in the US dollar demand. The impasse over the next round of the US fiscal stimulus measures dented investors’ appetite for riskier assets. The already weaker sentiment deteriorated further after the US President Donald Trump was tested positive for COVID-19.

Market participants now look forward to a key meeting between the EU’s chief negotiator, Michel Barnier, and his British counterpart David Frost on Friday. The incoming headlines will influence expectations if talks can enter the so-called tunnel, something that would signal a deal is within touching distance, which, in turn, will play a key role in driving the sterling in the near-term.

Apart from this, investors on Friday will also focus on the release of the closely watched US monthly jobs report. The headline NFP is expected to show that the US economy added 850K new jobs in September, down from 1.37 million in the previous month, while the unemployment rate is expected to have ticked down to 8.2% from 8.4%. The data, along with stimulus headlines will influence the USD price dynamics and produce some meaningful trading opportunities on the last day of the week.

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