GBP/USD: The major thing holding down the pound is Brexit

GBP/USD is held back by growing Brexit uncertainty while the US dollar remains on the back foot amid dovish Fed minutes. Thanksgiving's 4-hour chart is showing a bullish ascending triangle but a bullish breakout hinges on Barnier's London trip, FXStreet’s Analyst Yohay Elam reports.

Key quotes

“Serling's next moves seem to heavily depend on the travel plans of Michel Barnier, the Chief Brexit Negotiator for the EU. Barnier is set to end his quarantine – needed after a team member tested positive for coronavirus – and travel to the British capital for face-to-face talks. However, media reports suggest that he may call off his trip if the UK does not offer concessions. Investors need to see negotiations continue to remain hopeful.” 

“London remains in focus for pound traders due to the new tiers for coronavirus-related restrictions are set to be announced later in the day. The capital will likely return to the second level that it was at before the nationwide lockdown. If more significant limitations are imposed on the city, sterling could shiver.”

“Americans are celebrating a relatively somber Thanksgiving, amid rising coronavirus cases, hospitalizations and deaths. Moreover, while the big bulk of data released on Wednesday can be characterized as mixed, the back-to-back increase in jobless claims is a cause for concern and weighs on the greenback.”

“The most significant dollar downer came from the Federal Reserve. Minutes from the latest meeting showed that members actively discussed the bond-buying scheme, potentially readying an increase in its size.”

“Pound/dollar continues trading in an ascending triangle – a bullish technical pattern. Attempts to break above the ceiling of 1.3397 have been unsuccessful, yet there is still room for a breakout. Above 1.3397, the next cap is 1.3420, followed by 1.350. Support awaits at the daily low of 1.3350, followed by 1.3310, a resistance line from mid-November.”