GBPUSD Under Pressure Ahead of PM Johnson Speech
The GBPUSD price is little changed today as traders look ahead to this week’s Brexit talks and the recent developments on Covid vaccine. The pair is tilting higher, with most analysts expecting a breakthrough this week.
UK and EU teams are meeting this week in Brussels to try and reach an agreement on the future relationship between the two sides. In a tweet on Sunday, David Frost, the Chief UK negotiator, said that the key positions of the UK still remained.
In particular, he said that the UK deserved the right to manage its territorial waters and implement laws that benefit it.
In a rejoinder, the EU warned that time was running out for the UK to reach an agreement.
Still, analysts believe that, despite the rhetoric, the two sides will reach a deal in the next few weeks. This is because such outcome is in the interest of both the UK and the European Union.
In addition to Brexit, the GBPUSD is reacting to the overall weaker dollar as a risk-on sentiment returned to the market. That happened after Moderna announced that its vaccine was almost 95% efficient, which is a better outcome than most people were expecting. That news, coupled with last week’s news by Pfizer led many people to swap their dollars for other currencies.
On the hourly chart, we see that the GBPUSD price has been moving in an upward trend since October. During this trend, the pair has made a widening channel that is shown in blue below. It has also moved above the 15-day and 25-day exponential moving averages.
Therefore, for today, I suspect that the pair will remain at the current range, with the main target being at the resistance at 1.3250. If it moves above this level, the next key resistance to watch will be 1.3270. On the flip side, if the price falls, the first support to watch will be 1.3165.
