British pound spikes as optimism of a Brexit deal rises
The British pound rallied today as traders turned optimistic about a Brexit deal. That happened after Boris Johnson and Ursula von der Leyen committed to negotiating to the “bitter end.” The two asked their negotiators to keep working on a deal, meaning that the process could go on until 31 December, the ultimate deadline. According to media reports, the EU has made some concessions about adding “lightning tariffs” in case the UK went against parts of the deal. Analysts believe that the two sides will ultimately reach a deal because of the dire consequences of having no deal.
The price of crude oil rallied today as the market reacted to the decision by the Food and Drug Administration (FDA) to authorise the vaccine developed by Pfizer and BioNTech. The two companies have already started to distribute the vaccine to most American states. Other countries will also likely start receiving the vaccine in the next few weeks. A vaccine is a good thing for crude oil prices because it will lead to more demand as people start travelling. However, the biggest concern for oil prices is that the number of active oil rigs in the United States is on an upward trend.
US futures are pointing to a higher open as hopes of a stimulus deal in Congress increases. Over the weekend, Steve Mnuchin and Nancy Pelosi continued to negotiate for a new deal. They both sounded optimistic. At the same time, a bipartisan group of legislators in the senate continued their negotiations. All this means is that the country will possibly get more financing before the end of the year, which will be a good thing for companies in the Dow Jones, Nasdaq 100, and S&P 500.
The GBP/USD pair rose to an intraday high of 1.3438, which is the highest it has been since December 9. On the 30-minute chart, the pair has managed to move above the 25-period and 15-period exponential moving averages. The signal and main lines of the MACD and the Relative Strength Index (RSI) have continued rising. Therefore, it seems like bulls have the momentum, which means that the pair could continue rising as bulls aim for the next resistance level at 1.3480.
The EUR/USD pair rallied to an intraday high of 1.2154, which is a few pips below the YTD high of 1.2177. On the four-hour chart, the price is slightly above the 25-day moving average while the Relative Strength Index (RSI) has risen to 60. Also, the pair is substantially higher than the important support of 1.2057. Therefore, the pair is likely to continue rising during the American session, with the main level to watch being the resistance at 1.2177.
The EUR/GBP pair dropped to an intraday low of 0.9054, which is the lowest it has been since Thursday last week. On the four-hour chart, the price has also managed to move below the 15-period and 25-period moving averages. Similarly, the Relative Vigour Index (RVI) has made a bearish crossover while the Relative Strength Index (RSI) has moved from the overbought level of 70 to the current 43. Therefore, the pair will likely continue falling during the American session.