Brexit Trade Deal Expected Imminently, Sterling Strengthens Across The Board

Brexit And Sterling (GBP/USD) Price, Analysis And Chart:

  • Brexit deal expected to be signed-off shortly.
  • COVID-19 infections continue to jump higher.
  • Traders increase GBP/USD long positions

The UK and EU are said to be close to announcing that a post-Brexit trade deal has been agreed upon after months of haggling with both sides expected to push for final ratification before the end of the year. A series of recent phone calls between EU Commission President Ursula von der Leyen and UK PM Boris Johnson is said to have helped to move talks forward and closed the gaps on level playing field issues and fisheries. UK Parliament is expected to be recalled on December 30 to vote on any deal.

While sources reports broke the news yesterday, sending Sterling higher, today’s price action is relatively muted ahead of the announcement. Yesterday’s move higher is now underpinned and Sterling (FXB) is seen moving higher over the coming weeks and months after underperforming against a range of other currencies over the last 4 years.

The latest UK COVID-19 infection and fatality rates may weigh on Sterling in the near-term with both jumping sharply higher yesterday. While Brexit may well be finalized today, large swathes of the UK are in near-total lockdown and are expected to stay that way over the coming weeks. Six million more people will enter tier four on December 26, taking the total to 24 million while an additional 24.8 million people will remain in tier three.

GBP/USD is changing hands around 1.3575, a fraction below yesterday afternoon’s high, and may look to press back towards a cluster of levels seen back in March-April 2018 with a longer-term target around 1.4375. The move higher should be reasonably well supported and it may now be the time to look at sell-offs as potential buying opportunities for the medium- to longer-term (UDN)..

GBP/USD Daily Price Chart (May - December 24, 2020)

Brexit Trade Deal Expected Imminently, Sterling (GBP) Strengthens Across the Board

 

Disclosure: See the full disclosure for DailyFX here.

How did you like this article? Let us know so we can better customize your reading experience. Users' ratings are only visible to themselves.

Comments

Leave a comment to automatically be entered into our contest to win a free Echo Show.