GBP/USD: Covid vaccine optimism battles Brexit doubts above 1.3300

GBP/USD picks up bids around 1.333/40, up 0.31% on a day, while heading into London open on Monday. In doing so, the Cable cheers broad US dollar weakness, amid mixed catalysts at home, by keeping the week-start gap-up to 1.3313. Although the coronavirus (COVID-19) vaccine hopes can keep the bull hopeful, uncertainty surrounding Brexit can trim the monthly gains before the early December deadline.

MHRA is on the move, EU-UK stays at loggerheads…

Following the last week’s news that the UK’s Medicines and Healthcare Products Regulatory Agency (MHRA) is up for reviewing AstraZeneca’s covid vaccine, the Financial Times (FT) conveyed, during the weekend, that the Pfizer-BioNTech product to battle the COVID-19 will be approved soon. This suggests the Tory government is pushing the moves to cure the pandemic.

Also on the positive side are chatters that regulatory authorities in Europe and the US are also up for approving the key vaccines, which in turn suggests an early recovery from the deadly virus.

On the contrary, the European Union (EU) Brexit negotiator Micher Bernier is in London for the final push over the trade deal. Although key hurdles like fisheries, governance and competition rules are still unsolved, chatters that the European Commission President Ursula von der Leyen and UK PM Boris Johnson will talk over the deal favor the GBP/USD buyers.

Read: UK’s Raab: Brexit talks in 'reasonable position'

Risk sentiment stays mixed with the US and the UK stock futures trading negative while the US 10-year Treasury yields stay directionless by press time.

While the Brexit and the vaccine updates are likely to keep the driver’s seat, the early-month US PMIs can offer intermediate entertainment to the markets. It should also be noted that developments surrounding the London-Beijing should also be closely observed as the joint efforts to battle China by the Western countries like the US, Australia and the UK weigh on the risk-tone and may weigh on the quote.

Technical analysis

With the confirmation of a short-term rising wedge bearish formation on the daily chart, GBP/USD bears are likely targeting October’s top near 1.3175 during further declines. However, sustained trading beyond 1.3400 will help the quote to refresh the yearly top beyond 1.3482.