GBP/USD wobbles around 1.2950 as Brexit drama continues

• GBP/USD seesaws inside the 1.2935/60 trading range after stepping back from 1.3025 the previous day.
• The UK sees no basis to resume Brexit talks despite terming Barnier’s response as constructive.
• Britain’s Chief Scientific Adviser Vallance says the vaccine will not be available in the UK until spring.
• US stimulus talks continue with mixed signals, market sentiment dwindles.

GBP/USD picks up bids to 1.2950 while heading into Tuesday’s London open. Even so, the sterling looks for a clear direction as it keeps the 25-pip range at press time. While fears of a no-deal Brexit have gained momentum after the UK’s “NO” to further talks, the absence of any updates keeps the pair traders troubled. Not only in London but Washington also suffers from mixed signals, concerning the stimulus deadlock, while challenging the quote’s moves.

Frost and Barnier remain in close touch

Having initially appreciated the constructive Brexit approach by the European Union’s (EU) chief negotiator Michel Barnier, policymakers at the UK shut the door on the face of the bloc’s efforts to restart the talks after failing in the last weekend. While highlighting this, Reuters said “Britain sees no basis to resume trade talks with the European Union unless there is a fundamental change in approach from Brussels.”

Even so, the piece mentioned a tweet by the UK’s Brexit diplomat David Frost to renew hopes of further talks. The tweet said “the EU still needs to make a fundamental change in approach to the talks and make clear it has done so. We will stay in close touch.” While the EU is ready to discuss the trade, France is keeping its hardstand whereas Bloomberg’s update that the UK could rewrite the treaty-breaking Brexit bill as part of the EU deal suggests something is still possible on the road.

Talking about the virus, UK’s Health Secretary Matt Hancock marked worries after the coronavirus (COVID-19) led deaths doubled in the last 12 days. Also on the negative side are the comments from Sir Patrick Vallance, the Government’s Chief Scientific Adviser, signaling that it is “unlikely” a coronavirus vaccine will stop the disease completely, per The Guardian.

On the other hand, US policymakers keep jostling for the much-awaited stimulus. The latest updates mention that the US Senate leader Mitch McConnell indicates voting on the bill during this week while the Minority leader Chuck Schumer said that the Republican stimulus proposal remains unacceptable.

Amid all these plays, US stock future print mild gains whereas their British counterparts look for a clear direction. Further, the US 10-year Treasury yields refrain from further declines near 0.77% but stocks in Asia-Pacific trade mixed at the time of writing.

Moving on, a light calendar ahead of the US session will keep GBP/USD traders searching for Brexit and COVID-19 news. During the North American trading, updates concerning the US aid package and US housing numbers for September can entertain intraday traders.

Technical analysis

The 1.2900-1.3015 region, comprising an area between the 21-day and 50-day SMA, restricts short-term moves of the GBP/USD prices. However, the bulls are likely to occupy the throne unless the quote slips below the 200-day SMA level surrounding the 1.2700 threshold.