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GBP / USD: Pound Becomes The Strongest G7 Currency

The GBP / USD pair is demonstrating positive dynamics today. Pound remains the strongest G7 currency amid optimism about Brexit and hopes for the UK economy to improve thanks to the Covid-19 vaccine.

 

Michel Barnier stated on Monday that after technical consultations over the weekend, the parties resumed full talks on Monday. Fundamental differences remain on a number of key issues, but the parties intend to continue to seek a compromise option.

 

Despite the fact that an agreement has not yet been reached, most investors are still betting on a soft Brexit and are confident that the UK and the EU will sign a trade agreement before the end of the year. Recently the head of the Bank of England Andrew Bailey said that the pound sterling will strengthen very much if the UK and the EU sign a trade agreement.

 

Additional support for the British currency in recent days has been provided by the positive news about the imminent use of the COVID-19 vaccine in the UK. On the eve of the Prime Minister of the country Boris Johnson said that statements from AstraZeneca about 90% effectiveness of the vaccine are very good news for the UK. The entire population of the country will be fully provided with this vaccine.

 

After falling below 1.3300, the currency pair resumed its upward movement. Despite the local decline, the bullish trend remains relevant. In the near future, we expect the price to recover to the 1.3400 area.

 

  • Resistance levels: 1.3385, 1.3440, 1.3500;

 

  • Support levels: 1.3300, 1.3230, 1.3150.

 

The main scenario is an increase to 1.3385.

 

An alternative scenario is a decline below 1.3300 and a move to 1.3230.

 

 The current fundamental outlook is moderately positive. We consider longs around the level of 1.3300.

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