GBP/USD Forecast: Brexit returns to the limelight

Valeria Bednarik FXStreet

GBP/USD Current price: 1.3154

Markets remain in risk-on mode amid hopes for a coronavirus vaccine.
UK Finance Minister Rishi Sunak said that significant progress was made in Brexit talks.
GBP/USD is neutral-to-bullish trading above the 1.3100 figure.

The GBP/USD pair is ending the first day of the week unchanged around 1.3150, after reaching a fresh two-month high of 1.3207. The British Pound found eased as speculative interest rushed into the greenback on positive coronavirus vaccine news, but its slump was limited by encouraging Brexit headlines. UK Finance Minister Rishi Sunak said that significant progress was made in Brexit talks while announcing a plan to provide stability to the financial sector in the post-Brexit era. Meanwhile, EU's chief Brexit negotiator Michel Barnier said they are redoubling their efforts to reach an agreement on the future EU-UK partnership.

The UK calendar had nothing to offer on Monday, but this Tuesday, the kingdom will publish its October employment figures. The ILO unemployment rate is foreseen rising to 4.8% from 4.5%, while the Claimant Count Change is seen at 36K from 28K in September. Ahead of the monthly employment report, the country will see the release of the BRC Like-For-Like Retail Sales, expected to have increased by 8.4%YoY in October.

GBP/USD short-term technical outlook

The GBP/USD pair held above 1.3100, with approaches to the level attracting buyers. The 4-hour chart shows that the pair remains above a firmly bullish 20 SMA, which continues advancing above the larger ones. The Momentum indicator has eased from daily highs, but is still within positive levels, while the RSI indicator stabilized around 57, indicating limited selling interest at the time being.

Support levels: 1.3110 1.3065 1.3020

Resistance levels: 1.3185 1.3230 1.3290

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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