GBP/USD: UK lockdowns and US election tensions to disrupt the Brexit bounce

Dual Brexit and US fiscal stimulus talks continued to dominate cable's trading, resulting in choppy trading, an eventual breakout to the upside, and a retreat afterward. US politics are set to take over in the pre-elections week, while UK coronavirus cases and lockdowns will probably become more prominent, Yohay Elam, an Analyst at FXStreet, reports. 

Key quotes

“The Brexit saga has been going for over four years, and with two months left until the UK ceases to be a de-facto member of the EU, any headline could rock markets. The end of October was one of the deadlines for reaching a deal, but the data will likely come and go without a deal. Nevertheless, any comment on progress could boost sterling, and a total stall of negotiations would hurt it. 

“The increase in COVID-19 cases and the ensuing lockdowns are moving rapidly. If Liverpool's Tier Three restrictions succeed in flattening the curve, it could serve as an encouraging sign, boosting the pound. On the other hand, if additional regions enter the highest lockdown level, especially London – sterling could suffer.”

“An influx of post-debate opinion polls is likely early in the week. While national surveys grab the headlines, what counts is battleground states. Polls from Pennsylvania – the closest of the northern states that Trump won narrowly in 2016 are of high importance. Florida, the perennial swing state, is also critical as it sends a large number of electors, is highly contested, and counts early votes ahead of election day. If Biden wins Florida, the race is all but over. However, if Trump carries his new home state, the race is considerably closer.” 

“COVID-19 cases are rising in colder states, with the battleground of Wisconsin standing out. Will the disease depress turnout and favor Trump? Will it shed more light on his mishandling of the crisis and push voters toward Biden? The increase is known; the impact remains a mystery.”

“Durable Goods Orders for September are set to print modest changes. Investors are eyeing Nondefense ex-air spending, considered ‘the core of the core.’ These investment figures feed into Gross Domestic Product calculations for the third quarter. After an annualized collapse of 31.4% in second-quarter GDP, a bounce of a similar magnitude is on the cards now. The first release tends to have more impact than revisions and is set to impact future stimulus calculations, allowing it to impact markets despite tensions ahead of the vote.”


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

USD/JPY ignores downbeat Tokyo CPI, trades mixed above 104.00

USD/JPY traders look for strong signals to break the chain of three-day declines. Tokyo CPI slipped below -0.6% forecast, core CPI matched -0.7% expected in November. Risks struggle amid US off, mixed news on vaccine, US-China front. A light calendar can extend the sideways moves.


AUD/USD: Fizzles upside momentum below 0.7400 but bears await clear signals

AUD/USD eases after refreshing the three-month top the previous day, downside have recently been confined though. Chatters surrounding US-China relations, virus woes probe risk-on but absence of the US traders, light calendar elsewhere, limits the moves.


Gold: Bears noting old support for a discount

The price of gold has broken into bearish territory below a 38.2% Fibonacci retracement. In the recent good news in markets, the price of the yellow metal has come under renewed pressure. Bears will seek a discount on a pullback to retest old support, expected to turn resistance. 

Gold news

WTI regains $45.00 even as choppy session limits the moves

WTI fades pullback moves from the highest in nine months. The energy benchmark eased from the multi-day high the previous day as global optimism, mainly fuelled through the coronavirus (COVID-19) vaccine hopes, fizzled. Also challenging the oil bulls was the US holiday due to Thanksgiving Day.

Oil News

Black Friday 2020 Discounts!

Learn to trade with the best! Don't miss the most experienced traders and speakers in FXStreet Premium webinars. Also if you are a Premium member you can get real-time FXS Signals and receive daily market analysis with the best forex insights!

More info