- GBP/USD wavers around multi-day high as US dollar stays offered amid risk-on mood.
- Market sentiment stays positive following Biden’s victory in US elections.
- UK PM Johnson suggests the “outlines” of an agreement is clear, EU’s Barnier cheers continuing Brexit talks in London.
- BOE’s Bailey will be observed to reconfirm the latest cautious optimism.
Despite recently easing from 1.3188 to 1.3183, GBP/USD prints 0.23% intraday gains while heading into Monday’s London open. The broad US dollar weakness, amid market optimism backed by the US election results, propels the run-up to the fresh multi-day high. Also favoring the bulls could be Brexit optimism ahead of the key trade talks in the UK. In the meantime, a speech from the BOE Governor Andrew Bailey will also be important to watch for fresh impetus.
UK PM Boris Johnson’s spokesperson conveyed, “Significant differences in a number of areas, including the so-called level playing field and fish,” during Saturday. However, the British leader said on Sunday, per the BBC, that the “outlines” of an agreement were clear and a deal was “there to be done”. Recently, the European Union’s (EU) Brexit negotiator Michel Barnier cited happiness while returning to the Brexit negotiation table in London. The diplomat also mentioned that work would continue securing a trade deal with Britain, per Reuters. The policymakers continue to stay at loggerheads over the key issues despite reaching closer to the December 31, 2020 deadline. It should also be noted that the diplomats earlier planned to have a deal before the next week’s EU summit. Hence, this week’s talks in London will be crucial if tackled correctly.
Elsewhere, BOE Governor Bailey is up for speaking at the Green Horizon Summit, via satellite at 10:35 GMT. The policymaker struck upbeat comments following the increase in BOE’s asset purchase program during the last week. As a result, GBP/USD bulls will seek confirmation of the cautious optimism from the central banker to eye the pair’s further advances.
On a broader front, global markets cheer Joe Biden’s victory in the US presidential elections. While Donald Trump’s lawsuits are trying hard to spoil the party, risks cheer stimulus hopes. In doing so, the worsening of the coronavirus (COVID-19) wave 2.0 gets a little attention even as the global count crosses 50 million cases.
While portraying the risk-on mood, stock futures in the US and the UK remain bid while the US 10-year Treasury yields regain above 0.82% by press time.
Technical analysis
A clear break beyond an ascending trend line from October 27, currently around 1.3175/80 becomes necessary for the GBP/USD bulls to aim for the 1.3200 threshold. Meanwhile, the 1.3100 round-figure and last Wednesday’s high of 1.3050 can restrict the pair’s pullback moves before directing the sellers toward a 200-bar SMA level of 1.2962.
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