GBP/USD: Poised to reclaim the 1.3700 level

The UK Parliament approved the Brexit deal and pushed the GBP/USD pair to fresh 32-month tops. The cable now seems to have stabilized just above the 1.3600 mark and is more likely to consolidate in a range amid typical year-end thin trading volumes as bulls turn cautious amid further COVID-19 restrictions in the UK, FXStreet’s Haresh Menghani briefs.

Key quotes

“The British pound largely shrugged off an unprecedented level of COVID-19 infection across the UK. Several areas of the country went into the toughest tier-4 restrictions on Wednesday after the UK reported over 50,000 news cases for the second day in a row.”

“In the latest Brexit-related development, UK lawmakers approved the post-Brexit trade deal with the European Union and reports indicate that the Queen has granted the accord royal assent.”

“There isn't any major market-moving economic data due for release from the UK. Meanwhile, the US economic docket highlights the only release of the usual Initial Weekly Jobless Claims. This, in turn, leaves the pair at the mercy of the USD price dynamics. That said, developments surrounding the coronavirus saga might influence the broader market risk sentiment and infuse some volatility, allowing trades to grab some meaningful opportunities on the last day of the year.”

“The cable still seems poised to prolong its recent upward trajectory and aim to reclaim the 1.3700 mark. Some follow-through buying has the potential to lift the pair further towards the next major hurdle near the 1.3745-50 region. On the flip side, any meaningful pullback below the 1.3600 mark might now find decent support near mid-1.3500s.”