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GBP/USD: bulls in charge with sights for 1.3320

  • GBP/USD well bid targetting 1.3320 resistance.
  • Shift toward a more constructive tone of Brexit negotiations underpins upside.

GBP/USD is on the bid, trading at 1.3292, up 0.45% on the day, having posted a daily high at 1.3298 and low at 1.3213.

Sterling is making a seventh consecutive session of gains while Brexit developments have underpinned improved sentiment on the back of the recent shift toward a more constructive tone of negotiations with news that the UK is preparing to increase its offer for in the EU divorce bill. 

UK budget: every little helps?

"As expected, Chancellor Hammond delivered a budget with few major changes but a wealth of incremental measures. This doesn't change materially the outlook for the UK economy; growth is set to remain fairly sluggish and hampered by Brexit uncertainty," explained analysts at ING Bank.

Elsewhere, the DXY is - 0.49% at the time of writing at 93.51 of a range between 93.496 - 93.962 ahead of the FOMC minutes. Also, the much weaker-than-expected US durable goods orders data was a further weight to the dollar that came in as a monthly contraction of 1.2% for October vs the expected +0.3%.

GBP/USD levels

Analysts at Scotiabank noted that GBP has almost fully retraced its decline from the early November high. "Trend and momentum indicators are modestly bullish, and GBP has decisively broken above its 40 day MA. We note the importance of near-term resistance between 1.3280 and 1.3320 and look to support at 1.3220."

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