- GBP/USD saw some dip-buying around 1.3000 US Dollar weakness.
- The US political uncertainty & a slight pick up in stock markets undermined the safe-haven USD.
- Brexit uncertainties keep buyers from placing aggressive bets, limiting the pair’s upside.
GBP/USD gained 55-60 pips from the day’s lows and rallied to a day’s high near 1.3060 before it quickly retreated a few pips..
GBP/USD continued seeing dip-buying around the key 1.3000 psychological mark, or 200-day SMA support. The pair was supported by weaker demand for the US dollar. Despite negative covid headlines, the US Dollar struggled to pick up on caution surrounding the US presidential election.
The polls point to a solid lead for the Democrat candidate Joe Biden over President Trump. That said, a narrow lead in certain key swing states increased uncertainty about the actual outcome. As a result, USD bulls are cautious lifting GBP/USD after three consecutive days of losses.
A mild pick up in stock markets undermined the US Dollar’s safe-haven status. Meanwhile slow progress in the US stimulus negotiations, plus concerns over the economic impact of fresh lockdown measures could keep a lid on the optimism, which would benefit USD..
The USD barely reacted to better-than-expected US Durable Goods Orders data. Durable goods orders increased by 1.9% MoM in September while orders excluding transportation increased by 0.8%. Analysts had been expecting growth of 0.5% and 0.4%, respectively.
GBP/USD upside could be capped as investors wait for Brexit trade talk updates. The EU’s Chief Brexit Negotiator, Michel Barnier has extended his stay in London until Wednesday. This has been seen as a positive sign boosting optimism for a last-minute Brexit trade deal.
There is still an element of scepticism surrounding the chances of a deal being reached given the sticking point of fisheries. This has weighed slightly on GBP/USD which has retreated. And now only trades mildly higher at 1.3030.