GBP/USD Forecast: Brexit talks remain in darkness on Black Friday, bullish triangle in danger

GBP/USD has been retreating from the highs as Brexit talks remain stuck.
The greenback remains under pressure amid transition and vaccine optimism.
Black Friday's four-hour chart is showing that cable is at risk of falling off the ascending triangle.

Yohay Elam FXStreet

Is it just darkest before a Brexit dawn or are talks about to fall apart? Chief EU Negotiator is traveling to London for in-person talks after completing his quarantine, yet that is the only bit of positive news coming from the negotiations.

UK Prime Minister Boris Johnson has said that the likelihood of a deal depends on the EU and that Britain would prosper with or without an agreement. His comments follow similar finger-pointing by an unnamed EU official who said that there are disagreements on the known topics of fisheries, governance, and setting a level-playing field.

Similar to European Commission President Ursula von der Leyen, Barnier was quoted as saying he does not know if a deal is possible. GBP/USD has reacted to the news with a fall, yet there while both sides continue talking, there is hope.

Everything else favors gains for cable. With the upcoming expiry of the nationwide lockdown, London will return to Tier 2 rather than struggle under more severe Tier 3 terms. UK coronavirus cases continue their downtrend.

While COVID-19 statistics are moving in the wrong direction – a new record of over 90,000 hospitalizations was recorded on Thanksgiving – investors cheer an upbeat political development. President Donald Trump said he would leave the White House if the Electoral College votes in favor of President-elect Joe Biden. The safe-haven dollar is under pressure amid greater political certainty.

Markets also remain hopeful about a vaccine, despite some confusion from the recent data released by AstraZeneca and the University of Oxford. The better efficacy rate of 90% was seen only in a smaller group of people aged 55 or younger. Nevertheless, the British regulators are set to approve the immunization, pending more data.

Overall, Brexit is driving sterling lower while everything else is pointing in the other direction.

GBP/USD Technical Analysis

Pound/dollar is dipping below the bullish ascending triangle. The breakdown is yet to be confirmed, but upside momentum on the four-hour charge is already fading.

Support awaits at 1.3310, which was a double-top and now converges with the 50 Simple Moving Average. It is followed by 1.3265 and 1.3245, which worked as cushions earlier in November.

Resistance is at the recent high of 1.3397, and then by September's peak of 1.3495. Close by, the December 2019 high of 1.3510 awaits.

More GBP/USD Three reasons to expect a sustained Santa rally for sterling

Author

Yohay Elam

FXStreet

Yohay is in Forex since 2008 when he founded Forex Crunch, a blog crafted in his free time that turned into a fully-fledged currency website later sold to Finixio.

GBP/USD flirts with weekly highs in the Fed's aftermath

GBP/USD reversed early losses following the Federal Reserve decision to keep rates on hold and neared the 1.3360 level before shedding some ground. Focus shifts to Governor Kevin Warsh's speech, while the Bank of England will announce its monetary policy decision on Thursday.

EUR/USD extends rally pass 1.1450 on Fed's Warsh

EUR/USD trades at fresh weekly highs above 1.1450, following the Federal Reserve monetary policy decision to keep interest rates on hold. The statement showed policymakers remain confident in economic progress while blaming inflation on energy prices. The divided vote among officials put in doubt a September hike, leading to sharp US Dollar losses.

Gold hovers around $4,100 as Fed decision hits the USD

Gold surged following the Federal Reserve's decision to keep the benchmark interest rate unchanged at 3.50%-3.75%. Policymakers noted that inflation remains elevated and that economic activity is expanding at a solid pace despite elevated uncertainty, spurring doubts about a rate hike in September. XAU/USD peaked above $4,100, now battling to retain the level.

No soft target: Warsh vows to return inflation to 2%

The Fed left interest rates unchanged at 3.50%-3.75%, but the decision carried a distinctly hawkish edge as three officials voted for an immediate 25-basis-point increase. Chair Kevin Warsh reinforced that message, insisting there was no tolerance for a softer inflation target and warning that the Fed would not hesitate to act.

How the CLARITY Act unlocks Wall Street’s tokenization pipeline

The United States (US) Digital Asset Market Clarity Act (CLARITY Act), awaiting a full Senate floor vote, promises to unlock Wall Street’s potential to tokenize financial assets, including equities, US Treasuries, private credit, real estate and commodities at a scale that could supercharge the real-world asset (RWA) market from the current $17 billion level to $5.5 trillion by 2030, according to

US Dollar mid-year outlook: Exceptional currency, exceptional risks?

The US Dollar enters the second half of 2026 in a markedly different position from a year ago. The King currency has recovered, reflecting persistent US inflation, changing expectations for Fed policy, geopolitical tensions and renewed demand for defensive assets.