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  • GBP/USD picks up bids amid fresh risk-on mood, probes intraday top.
  • UK’s dropping of an IMB clause may help PM Boris Johnson to have a nice dinner with EU Chief Ursula von der Leyen.
  • British Cabinet Minister Michael Gove’s “in principle agreement” couldn’t get the bloc’s accolades.
  • EU’s Brexit negotiator Michel Barnier says the chance of deal is ‘very slim’.

GBP/USD rises to 1.3380, up 0.17% intraday, while heading into Wednesday’s London open. The Cable recently picked up bids as the US dollar dropped across the board on the market players rush to equities, amid stimulus hopes. However, the bulls are cautious while snapping a three-day losing streak as UK PM Johnson is preparing for the make-or-break Brexit moment.

Despite rejecting all the clauses relating to the Northern Ireland protocol in the Internal Market Bill (IMB), the British policymakers couldn’t please their regional counterparts as differences over fisheries, level playing field and governance persists. This comes after UK’s Brexit minister Gove announced a “in principle” deal on major aspects.

Ahead of the meeting, the UK source, as per Reuters, said, “We will not compromise on reclaiming UK sovereignty”. The European Union’s (EU) Chief Negotiator Michel Barnier, on the other hand, warned the chance of a Brexit deal was now “very slim”, per The Guardian.

The pair traders await details of UK PM Johnson’s visit to Europe where he will have a dinner chat session with EU President Ursula von der Leyen while trying to overcome the Brexit hurdle. Although no clear decision is likely to be rolled out, positive announcements will help continue the Brexit talks beyond Thursday’s European Summit.

Other than Brexit, hopes of US COVID-19 stimulus also favor the GBP/USD buyers as the global markets turn positive amid positive expectations over the much-awaited aid package. Elsewhere, the Sino-US tussle and the surge in the American covid data couldn’t gain major attention.

Read: Asian Stock Market: Chatters over vaccine, stimulus favor bulls to track Wall Street gains

Looking forward, a light calendar can keep GBP/USD traders cling to the US stimulus and Brexit headlines. While nearness to the US aid package can favor the bulls, Brexit uncertainty tames the upside.

Technical analysis

Repeated failures to decline below 21-day SMA help GBP/USD to pierce 10-day SMA near 1.3380 while eyeing the 1.3400 threshold. Meanwhile, a downside break below 21-day SMA level, at 1.3317 now, can recall November 13 low close to 1.3110.