GBP/USD flirts with three-month top as US dollar weakness battles Brexit, covid woes
- GBP/USD struggles for a clear direction near the highest levels since September 02.
- UK’s coronavirus (COVID-19) deaths rise to the early May top.
- EU Chief rekindles odds of no-deal, Irish PM marks “good results” in talks.
- US Thanksgiving Day can restrict market moves amid a light calendar, risk reshuffle can’t be ruled out.
Having rallied for consecutive nine-day, GBP/USD bulls catch a breather around 1.3390 while heading into Thursday’s London open. In doing so, the quote stays near the fresh high since September 02 of 1.3397, marked earlier in Asia. While receding Brexit optimism and the UK’s covid fears tame the bulls, the US dollar’s losses outweigh everything amid a quiet session on Thanksgiving Day.
The UK Finance Minister Rishi Sunak’s effort to tame the biggest budget deficit since world war two couldn’t disappoint the Cable buyers the previous day as the US dollar index (DXY) dropped to a fresh low since September 01. Not only the downbeat data but risk-on mood also negatively affected the greenback on Wednesday.
On the other hand, the European Commission head, Ursula von der Leyen, showed readiness to walk away with no trade deal while France also sounded grumbling over the fisheries issues. Though, Ireland’s PM Micheal Martin seemed hopeful in recent comments.
Elsewhere, the UK’s covid-related death toll surged by 696 to 56,533, the highest daily jump since May 5, on Wednesday. Even so, UK PM Johnson kept up the mood to celebrate Christmas.
It should be noted that the US-China tussle is back in focus with both the nations missing on the trade promises even after 10 months of the much-cheered deal. Also, the American government sanction on four companies from China and Russia, concerning the Iran missile program, spoils the mood.
However, futures stay mildly positive amid vaccine hopes and a light calendar due to the US holidays. GBP/USD bulls are likely to stay on the driver’s seat as the DXY remains pressured and the Brexit hopes, despite receding off-late, remain on the table.
Technical analysis
Overbought RSI conditions tease bears to look for entries below an upward sloping trend line from November 02, at 1.3360.
Author
Anil Panchal
FXStreet
Anil Panchal has nearly 15 years of experience in tracking financial markets. With a keen interest in macroeconomics, Anil aptly tracks global news/updates and stays well-informed about the global financial moves and their implications.
