GBP/USD picks up bids above 1.3200 on fresh Brexit optimism
- GBP/USD rises over 30 pips after UK’s Frost suggests a trade deal with the EU during early next week.
- Risk-on mood, mainly backed by the vaccine hopes, also favors the bulls.
- Bailey’s comments on the radar, risk headlines remain as the key.
GBP/USD is on the bids near 1.3225, intraday high of 1.3233, during the early Asian session on Tuesday. The cable rose immediately after The Sun rolled out news favoring odds of the soft Brexit. Also supporting the pair bulls could be the broad market optimism backed by the coronavirus (COVID-19) vaccine hopes.
Read: Breaking: David Frost tells PM Johnson to prepare to shake on EU trade deal ‘early next week’
Get real…
Although UK Brexit Minister David Frost tells PM Boris Johnson to expect a trade deal with the European Union (EU) early next week, fears over another brake in the talks were also spotted in The Sun. The reason could be traced to the continuous deadlock over fisheries and red tape, as cited in the news, which pushes both sides to “get real”.
Elsewhere, global markets also remain positive amid Moderna’s vaccine trial news, offering a 94.5% effective rate and easy to distribute/store. Recently, AP News also came out with the headlines suggesting the Johnson and Johnson’s two-dose vaccine trials.
Against this backdrop, the Wall Street benchmark managed to close on the positive side by the end of Monday whereas S&P 500 Futures look for fresh clues near 3,625, down 0.05%, by press time.
Looking forward, more details on the Brexit as well as comments from BOE Governor Andrew Bailey will direct the GBP/USD bulls amid a broad risk-on mood. Also important will be the COVID-19 updates and the vaccine news as the US recently struggles with the virus resurgence.
Technical analysis
Unless breaking below the monthly support line, currently near 1.3175, GBP/USD buyers are likely to refresh the monthly low of 1.3313.