GBPUSD keeps clinging to long-term tops while corrective attempts have been limited
The pound resumed the ascend after a retreat seen on Monday. Last week, the rally in the GBPUSD pair stalled just shy of May 2018 highs above, and the prices have been struggling to see a more robust ascent since then. However, the cable finishes the year on an upbeat note as traders continue to digest a resolution in Brexit talks along with the latest the US House of Representatives’ push for increased stimulus payouts to $2,000 from $600.
Positive risk sentiment keeps the safe-haven greenback under selling pressure these days. This in turn pushes high-yielding currencies north. Against this backdrop, the pound keeps clinging to long-term tops while corrective attempts have been limited.
GBPUSD has already recovered most of yesterday’s losses, having regained the 1.3500 figure following a bounce from the 20-DMA, today at 1.3425 during the early part of the European session.
However, further gains could be capped by concerns over a new variant of coronavirus and the imposition of lockdowns in the UK. Besides, traders will likely refrain from placing bets amid thin trading conditions ahead of the New Year holiday.
As of writing, the pair was changing hands just at the 1.3500 figure, off intraday highs around 1.3522 seen earlier in the day. In the short term, some profit-taking could take place and send the prices back to the mentioned moving average that represents the immediate significant support.
In the longer run, the reduced Brexit uncertainty should lift the appeal of the British currency against the US dollar. Besides, vaccination expectations along with a brighter outlook for the economic recovery could add to the buying pressure surrounding the cable down the road. As for the dollar itself, it could be further pressured in the first quarter of 2021 if the pandemic starts to recede, thus adding to upbeat expectations globally.