- Renewed USD selling prompted some short-covering move around GBP/USD on Tuesday.
- US political uncertainty drags on USD.
- Risk-on mood also added pressure to safe-haven USD, supporting the pair.
The USD sold off early in the European session, boosting GBP/USD to the day’s high at 1.2980.
GBP/USD built on Monday’s rebound from 1.2855 a two-week low, picking up traction in early trade on Tuesday. Investors looked beyond a second UK nationwide lockdown.US dollar weakness was a key factor lifting GBP/USD.
Investors are unwinding USD bullish bets as caution increases surrounding the actual outcome of Tuesday’s US presidential election. Furthermore,, the upbeat market mood – despite tighter coronavirus-induced lockdown restrictions has undermined the safe haven USD
Brexit talks continue, suggesting that both the EU and the UK are pushing to seal an agreement before the end of the transition period. Optimism for a last-minute Brexit deal is giving the Pound a boost.
A sudden, recent spike could become technical buying on a meaningful move beyond the overnight highs,of 1.2940 region. Upside could be limited ahead of the key event risk – the US elections.