- GBP/USD’s fate continues to hinge on Brexit developments.
- DXY resumes drop amid Fed-Treasury clash on emergency funds.
- Focus on UK Retail Sales and covid data for further directives.
GBP/USD looks to extend its bounce towards 1.3300 heading into the UK Retail Sales release. The annualized British spending is seen higher by 4.2% in October vs. 4.7% previous.
The bulls are back in charge as the US dollar resumes its Thursday’s slide despite the clash between the Fed and US Treasury seemingly weighing on the investor sentiment.
US Treasury Secretary urged the world’s most powerful central bank to withdraw some of the pandemic lendings. The rollback of the emergency funds is likely to threaten the global economic recovery, as the program was launched to counter the virus impact.
Further, reports that the US covid cases rose by a record of 185K on Thursday also intensified the risk aversion but appears to have little effect on the higher-yielding pound.
Thursday’s negative Brexit news, citing reports that the European Union (EU) preparing for no-deal Brexit plans amid dragging of the negotiations. Also, a stall in the in-person Brexit talks, after EU’s Chief Negotiator Michel Barnier self-isolated after a member of his team contracted the infection, also fails to deter to GBP bulls.
GBP/USD buyers remain hopeful that a Brexit trade deal will be reached this weekend at the latest, as being reported by some sources. In six weeks the UK’s transition period will end and it will leave the EU’s single market and customs union.
The pair awaits the UK Retail Sales data and global covid statistics for some near-term trading opportunities. Meanwhile, the Brexit developments will likely determine the next direction in the prices.
GBP/USD technical levels
“The stalled rally from Nov. 2 lows near 1.2850 will likely resume if the pair ends above 1.3312, invalidating the buyer fatigue signaled by the long upper wick attached to Wednesday's candle. Alternatively, a close below 1.3196 would negate the buy-the-dip mentality sentiment signaled by Thursday's long-tailed candle and open the doors to deeper declines,” FXStreet’s Analyst Omkar Godbole noted.
GBP/USD additional levels
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