GBP/USD: Buying Opportunity? Brexit Silence May Be A Bliss, Everything Else Just Noise

The UK immunization campaign continues in full swing and markets are applauding the kick-off of the US effort, coming as some 300,000 Americans lost their lives to the virus. Both countries are inoculating the Pfizer/BioNTech jab, and authorities are on course to authorize the Moderna one in the near future.

The competing virus vs. vaccine narratives are keeping markets stable for now, but the balance could shift both ways with new announcements on both fronts.

US fiscal stimulus talks have been muddling on in recent days but may receive fresh impetus. Senate Majority Leader Mitch McConnell called for a deal after remaining mostly silent. His move follows the formal election of Joe Biden as America’s 46th President. Progress on a $900 billion bill would boost sentiment and weigh on the safe-haven dollar.

Overall, the main theme remains Brexit, with several sideshows marginally moving pound/dollar while the waiting game continues. 

GBP/USD Technical Analysis

(Click on image to enlarge)

Pound/dollar dropped below the 50 and 100 Simple Moving Averages on the four-hour chart but holds above the 200 SMA. Momentum remains to the downside but is waning. Overall, bears have gained ground, but are far from full control.

Support awaits at the daily low of 1.3308, followed by 1.3225, which was a swing low last week. It is followed by Friday’s trough of 1.3140 and then by 1.3030.

Resistance is at 1.34, which capped cable in late November, followed by 1.3445, Monday’s high. Further above, 1.3480 and 1.3540 await GBP/USD.

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