GBP/USD Forecast: Brexit hopes and covid vaccine boost pound

Valeria Bednarik FXStreet

GBP/USD Current price: 1.3455

The EU and the UK extend efforts to clinch a post-Brexit trade deal.
The United Kingdom will start delivering a covid vaccine next week.
GBP/USD holding near a fresh year high, critical resistance at 1.3513.

The GBP/USD pair traded as high as 1.3499, a fresh 2020 high, ignoring persistent tensions in the Brexit front. An EU diplomat reported this Thursday that issues around fisheries and a level playing field are still unsolved. UK authorities made more optimistic comments, as Ireland’s Foreign Minister, Simon Coveney, said that there was a good chance the UK and the EU would secure a trade deal in the next few days. Investors are still hopeful that the UK and the EU may finally clinch a deal. Mixed Brexit-related headlines in the US afternoon put some pressure on the pair.

News that the UK will distribute a coronavirus vaccine next week may have also added to the pound’s momentum. Data wise, the Markit Services PMI was upwardly revised to 47.6 in November from a preliminary estimate of 45.8. On Friday, Markit will publish the November Construction PMI, foreseen at 52 from 53.1 in October.

GBP/USD short-term technical outlook

The GBP/USD pair is trading in the 1.3450 price zone as the US session comes to an end, maintaining its bullish stance. The 4-hour chart shows that technical indicators are barely retreating from near overbought levels, but the pair continues to develop above bullish moving averages. The December 2019 monthly high at 1.3513 provides a critical resistance, with further gains expected on a break above it.

Support levels: 1.3440 1.3390 1.3350

Resistance levels: 1.3515 1.3560 1.3605

View Live Chart for the GBP/USD

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Author

Valeria Bednarik

FXStreet

Valeria Bednarik was born and lives in Buenos Aires, Argentina. Her passion for math and numbers pushed her into studying economics in her younger years.

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