- GBP/USD is heading for the fifth consecutive week of gains ahead of a potential brexite deal.
The pair has formed an ascending triangular pattern on the daily chart.
The US Nonfarm payrolls will also be in play today.
GBP/USD is heading for its fifth consecutive week of gains as traders continue to be optimistic that the UK and European Union will enter into a brexite deal. In addition, the recent decision by the UK to approve a vaccine and the relatively weaker US dollar have boosted sentiment against the pound sterling.
GBP/USD gains for the fifth consecutive week
Important day for Brexit
Wednesday, the EU’s chief negotiator, Michel Barnier, warned that the next 36 hours would be crucial. This period ends today, which means that we may receive the outcome of the ongoing talks today.
In general, the two sides have made great progress on most issues in recent months. But two things have become potential obstacles. On fisheries, there are strong differences of opinion on how to proceed after Brexit.
While Britain made some concessions this week, France threatened to veto any agreement that would restrict its access to British waters. There are also questions about regulations and government support for companies. However, according to sources, there is hope that the two sides will reach an agreement by the end of the month.
In general, traders believe that a no-deal brexit will be a negative thing for Britain and the GBP/USD. The reason for this is the considerable volume of trade between the UK and the EU. In addition, disruptions in trade will have an impact on employment and supply chains.
Wage and salary trends in the USA outside agriculture
The weaker U.S. dollar has also helped to boost the GBP/USD exchange rate this week. Indeed, the Dollar Index is generally trading at its lowest level since February 2018.
As a result, the pair will also react to the Non-Farm Payroll numbers that will be released at 13:30 GMT. Economists believe that the pace of hiring slowed in November as the country struggled against the rising number of the virus. Several states, including California and Oregon, announced that they would stay home during the month.
As a result, economists surveyed by Reuters believe that the official number of non-farm payrolls rose by 469,000 in November. This is a smaller increase compared to the October figure of 638,000. They also believe that wages rose by 4.3% while the unemployment rate fell to 6.8%.
Technical Outlook GBP/USD
Technical Table GBP/USD
According to most forex brokers, the GBP/USD is trading at 1.3450, a few pips below yesterday’s high of 1.3483. This was an important price as it was also the highest level on September 1.
On the daily chart the pair forms an ascending triangular pattern. In technical analysis, this pattern is usually a bullish sign. Therefore, there is a high probability that the price will eventually break out later in the day. Should this occur, the next level to watch will be the psychological level of 1.3600.