GBP/USD stabilizes above mid-1.3200s after Brexit-led intraday volatility

The GBP/USD pair had some good two-way price moves during the early European session and now seems to have stabilized above mid-1.3200s.

The pair prolonged its recent bullish trajectory and shot to fresh two-month tops – levels beyond the 1.3300 round-figure mark – during the first half of the trading action on Wednesday. The GBP/USD pair, however, started losing momentum and retreated around 75 pips in reaction to the news that Brexit negotiators will miss the mid-November deadline to finalize a deal.

However, the fact that progress is being made, investors remained optimistic over the possibility of a last-minute compromise on key sticking points. It is worth reporting that Daily Express' Brussels correspondent, Joe Barnes tweeted this Wednesday that British negotiators have accepted the dispute settlement for goods and services, but not the level-playing field and fisheries.

This, in turn, continued underpinning the British pound and extended some support to the GBP/USD pair. Apart from this, a softer tone surrounding the 
US dollar further collaborated towards limiting any deeper losses for the major amid the recent positive development in late-stage COVID-19 vaccine trials.

Concerns about the continuous surge in new infections in the United States and the imposition of stricter restrictions in several US states revived hopes for a substantial fiscal stimulus to support the economy. This, along with a sliding US Treasury bond yields, kept the USD bulls on the defensive through the first half of the trading action on Wednesday.

Technical levels to watch