GBPUSD Soars to New 2020 Highs as UK Parliament Approves Post-Brexit Trade Deal

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Written By: Eno Eteng (MSTA)

Dec 31, 2020, 11:08 GMT 11:08

GBPUSD

Summary:

The GBPUSD soars to new 2020 highs as the UK Parliament approves the post-Brexit trade deal, with 24 hours to the December 31 deadline.

The GBPUSD is soaring higher and looks set to close 2020 at new yearly highs, after British lawmakers approved the post-Brexit free trade deal. The approval of the deal came on December 30, a full day before the final deadline of December 31.

However, it remains to be seen how far the Pound can sustain this rally. The coronavirus situation in the UK remains a problem, but Health Secretary Matt Hancock believes that progress would be achieved in spring 2021 when the coronavirus vaccines would have been fully deployed.

There is also the issue of how well the local services industry would recover in 2021 and beyond with the new deal in place. The GBPUSD is up by 0.34% and has exceeded the 9 May 2018 highs with the latest upside move.

Technical Outlook for the GBPUSD

The active candle extends the price above the 1.36117 resistance (3 Jan/9 May 2018 highs), which was breached by Wednesday’s candle. A close above this level confirms the break of that level, and opens the door towards the 1.37916 resistance.

On the other hand, failure to confirm the break of 1.36177 is the condition that sellers need to initiate a pullback to 1.35134, with 1.34765 lining up as an additional support.

GBPUSD Daily Chart

Written By: Eno Eteng (MSTA)

Eno is a certified financial technician and member of the UK Society of Technical Analysts. He loves to trade and write about stocks, Forex, and CFDs. Since 2009, he has consulted several financial companies as a trader and strategy developer. His work can be seen on several forex blogs and trading educational websites.