GBP/USD rallies towards 1.3400 pre-London fix, shrugs off downbeat Brexit updates

  • GBP/USD has rallied in recent trade as the London fix approaches, despite a lack of progress in Brexit talks.
  • The pair has pushed to fresh highs of the day above 1.3380 and is eyeing a test of 1.3400.  

GBP immune to negative sounding Brexit reports for now, benefits from pre-London Fix flows

Updates on the state of Brexit negotiations on Friday have not been good. French Foreign Minister Jean-Yves Le Drian recently commented that British overtures in Brexit talks remain insufficient. Moreover, he accused the UK of slowing talks over secondary subjects and playing with the calendar and urged fisheries will not be the “adjustment” variable in the talks.

Elsewhere, BBC reporter Katya Adler tweeted that, according to EU sources, there were doubts about EU Brexit Negotiator Michelle Barnie going to London to negotiate once he leaves quarantine on Friday, and that talks have not been going well.

These latest updates follow comments from the President of the European Commission von der Leyen, who said on Wednesday morning that she cannot say if there will be a deal and the next few days would be decisive.

But the lack of progress towards a deal is yet to dent sentiment towards GBP, with GBP/USD rallying back towards Wednesday morning and Tuesday highs around 1.3380.

Clearly, Wednesday’s Brexit news has done little to dent expectations that the two sides will eventually reach a deal on key sticking points. Just a little more brinkmanship to get through before the deal is reached seems to be the view of the market.

Looking ahead, any updates from UK sources as to how talks are going, or perhaps a response to comments from the French Foreign Minister, will be of note.

In terms of recent price action; GBP seems to be benefitting from pre-London Fix flows; Wednesday’s 4 pm London fix is essentially being seen as the final fix of the month, given that volumes are expected to be thin on Thursday, Friday and next Monday due to US participants taking time off to enjoy Thanksgiving celebrations.

GBP/USD eyes a retest of multi-month highs

With GBP/USD having rallied back above 1.3380 and seemingly immune to downbeat Brexit updates for now, the door seems wide open for a test of this week’s highs at just below 1.3400. A break of this level would take cable back to levels not seen since early September.

If recent upside is reversed by either a pick up in USD or an increase in Brexit pessimism, support levels of note include Wednesday’s and Tuesday’s lows on either side of the 1.3300 level, followed by Monday’s low at 1.3266.

Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.

Feed news

Latest Forex News

Latest Forex News

Editors’ Picks

EUR/USD rises above 1.21 amid better market mood

EUR/USD has been extending its gains, recapturing 1.21 as the market mood improves. The German ZEW Economic Sentiment beat estimates with 61.8 points. Treasury Secretary nominee Janet Yellen's testimony is awaited.


GBP/USD clings to 1.36 ahead of Yellen's testimony

GBP/USD is edging above 1.36 as markets eagerly Treasury Secretary nominee Janet Yellen's testimony. The UK parliament is set to process the Brexit deal as Britain ramps up its vaccination campaign.


Gold recovers further from multi-week lows, climbs to $1845 region

Gold gained positive traction for the second consecutive session on Tuesday. A modest USD pullback was seen as a key factor that benefitted the metal. The risk-on mood, rallying US bond yields might cap gains for the commodity.

Gold news

Breaking: Ethereum explodes to new yearly high, validating upward price action

Ethereum has ascended to new yearly highs after breaking the recent peak achieved in January. The flagship altcoin is trading at $1,372 amid the push for gains eyeing $1,400. 

Read more

US Dollar Index looks side-lined near 90.70

The greenback, when tracked by the US Dollar Index (DXY), appears to have moved into a consolidative range around the 90.70 level following the closing bell in Asian markets.

US Dollar Index News