​Potential Rally for GBP/USD on Hopes of Brexit Talks

WikiFX News (2 Dec.) - On Tuesday, the GBP/USD closed higher 0.8% with a rally of more than 6% off the September lows. The rising hopes that a Brexit deal can be reached suggests further gains for GBP/USD.

This week is a crucial one for the talks on a post-Brexit trade deal because both sides would be damaged in the case of no agreement. Sources imply that an agreement can be reached, albeit a very limited one.

Besides, all the coronavirus vaccine hopes, the prospect of an economic recovery, and fiscal and monetary support are encouraging flows out of safe havens like the US dollar into currencies seen as inherently riskier, including GBP.

GBP/USD is now testing the key resistance at 1.3494. A weekly close above the level is necessary to validate a further breakout. The pair is attempting to mark a fifth consecutive weekly advance.

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Chart: Trend of GBP/USD