• GBP/USD failed to push beyond 1.3100
  • Early advance inspired by US Dollar weakness.
  • Brexit uncertainties cap gains

The GBP/USD pulled back 50 pips from the high reached in the European session past 1.3100. The has now dropped back towards the lower end of its daily traded range.

Weakness in the US dollar boosted GBP/USD in the first half of the trading day on Friday.t. However, ongoing Brexit-uncertainties have capped gains and sparked selling at higher levels. GBP/USD sold off into the negative territory for the consecutive session.

Investors look towards US fiscal stimulus developments. Meanwhile, optimism over the first approved treatment for COVID-19 lifted investors’ spirits undermining the safe haven greenback Furthermore, expectations of a strong Democratic victory in the US Presidential elections added more downward pressure on the greenback, underpinning the GBP/USD pair.

The UK and EU have reportedly  made some progress on competition guarantees, including state aid rules. Fishing remains a sticking point. The UK Prime Minister Boris Johnson is insisting on taking back control over UK waters. The EU on the other hand wants access to the fishing waters. Brexit appears to be the only factor weighing on the GBP/USD pair.

Additional lockdown measures, to stem the spread of the second wave of coronavirus in the UK, kept GBP buyers from placing  aggressive bets,, instead prompted some GBPUSD selling action. The downside remains limited, at least for now, as investors await fresh Brexit updates.