GBP/USD prints fresh highs, bulls seeking a break towards 1.33 in near furture

• GBP/USD taking on the bear's and testing commitments in the 1.30s on dollar weakness.
• The market in increasingly bearish on the US dollar which is helping to push up cable.

After piercing post-Brexit support at 1.20 to a low of 1.15, GBP/USD has re-entered the 1.20-1.33 trading range.

GBP/USD is currently trading at fresh highs in the 1.30's as the market beats down the greenback a little more despite yesterday's relief rally following the Federal Reserve announcements.

GBP/USD is testing the 1.3080s, higher by 0.65% on the session so far having rallied from a 1.2944 low. 

Broad USD weakness, weighed by concerns over fiscal commitment and monetary policy space in the US, has benefitted GBP for the 10th day straight.

There are a number of factors to consider, with the euro creeping up on a critical 1.1850 area also.

Besides the data today rattling markets, both German and US Gross Domestic Produce, (downside surprise for Germany, unprecedented, but expected for the US) and US Jobless Claims, rising for the second week in a row and reinforced the COVID-19 fear factor,  US President Donald Trump tweeted.

President Trump's tweets have in the past been one to watch for until the markets became immune to the contact barrage of provocative messages towards China at the hight of the tariff war between 2018 and mid-2019.

However, in an unprecedented move, markets took note of today's tweet when Trump raised the possibility of delaying the US presidential election scheduled for November.

Trump, without evidence, repeated his claims of mail-in voter fraud and raised the question of a delay, writing in a post on Twitter, "delay the election until people can properly, securely and safely vote???"

In response, as CNN reports,

a large number of congressional Republicans, including members of House and Senate leadership, openly rejected President Donald Trump's suggestion Thursday that November's presidential election should be delayed, a move that the President would have no authority to make because the Constitution gives Congress the power to set the date for voting.

Positive pints on Trade talks with EU

Meanwhile, GBP has gained support from progress in trade talks with the EU in July, even though the two parties remain far apart.

Analysts at ANZ Bank explained that ''on the positive side, the EU has agreed to an arbitration process for dispute resolution following earlier hints at a willingness to explore a softer stance on state aid rules and possibly fisheries''.

The UK, meanwhile, has conceded to one overall agreement rather than various sectoral agreements and has also committed to remaining in the European convention on human rights. However, there hasn’t been any notable progress on level playing field arrangements and on fisheries.

Domestically, fiscal policy is modestly expansionary in the UK.

The analysts at ANZ expect the additional fiscal support of GBP30bn (1.5% of GDP)outlined in July to be added to the Autumn budget.

Record low gilt yields indicate no funding stress, in contrast to the sell-off in March. We have turned modestly positive in GBP through 2021.

GBP/USD levels

We see a gradual appreciation path for the currency, with GBP/USD ending this year at 1.31 before heading to 1.37 by end-2021. 

The pair is now testing the downward sloping resistance line which has been in place this year, a break of which will see the pair heading toward two-year barrier at 1.33.

We expect the latter to be eventually taken out by mid-2021.