The GBPUSD edged higher on Friday after two days of losses, after it was revealed today that a Brexit mastermind and a key ally of UK PM Boris Johnson is headed for the exit door. This is coming as key Brexit talks over fisheries and state aid continue to drag on.
The pair was boosted today by a slew of news that supported the sterling but pressured the greenback. It is widely believed in analyst circles that the exit of Dominic Cummings, a fierce campaigner of the 2016 Brexit “Leave” vote, could allow for a softer position in Brexit talks on the UK side, presenting a smoother pathway to a possible deal between the EU and UK. Cummings, a top adviser to the UK PM, leaves his position at the end of the transition period.
Meanwhile, the new coronavirus case count in the United States continues to rise at record levels. A new daily high of 150,000 was achieved on Thursday, with hospitalizations topping the 67,000 mark. The Governor of New York, Andrew Cuomo, imposed new restrictions yesterday and the city of Chicago has followed suit. Treasury yields are also lower as investment funds transit from stocks to bonds, pressurizing the US Dollar.
The GBPUSD is trading at 1.31611, which is a gain of 0.41% at the time of writing.
Technical Outlook for GBPUSD
The cable is now testing the 1.31754 resistance mark after today’s bullish price action. A break of this area allows the GBPUSD to aim for the prior highs of 19 August, 7 September and 10 November at 1.32663. The 4 September and 11 November high at 1.33193 forms the next upside target. However, a break of the channel’s return line is needed to send the pair towards 1.34765.
Conversely, a rejection and follow-through selling at the current resistance may allow the pair drop towards 1.30554. 1.29469 becomes visible if the channel’s trendline is broken, with 1.28589 also forming additional support to the south.
GBPUSD Daily Chart