GBP/USD gained traction for the second day in a row

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On Thursday, the GBP/USD pair moved to the upside at the beginning of the session and stayed near-daily highs, around the level of 1.2950. The pair gained some traction for the second day in a row yesterday. One of the critical factors that benefited the British pound’s rally was the absence of news about Brexit.  Besides, risk appetite weighed on the safe-haven USD and supported the pair’s upward move. 

The market’s prevailing optimistic sentiment has weighed on the US dollar against the British pound. Renewed optimism about new fiscal stimulus measures in the US has offset concerns about growing coronavirus cases and boosted investor confidence.

Trump declared he was ready for gradual spending measures after suspending talks with Democrats

Wednesday, Donald Trump, US president, stated that he was ready for gradual spending measures, including supporting people, small businesses, and airlines. It renewed hopes for additional stimulus. The news came after Trump suddenly refused negotiations with Democrats about the latest stimulus measures that changed market sentiment earlier this week. The positive move does not appear to be affected by the lingering uncertainties around Brexit.

Simon Coveney, Irish Foreign Minister, stated that the EU’s chief Brexit negotiator Michel Barnier would not seek an intensification of negotiations except if the UK changes its position on the state aid. Coveney also added that it is challenging to imagine an area for fishing.

Considering that notable differences remain between the UK and the EU on the post-Brexit trade deal, the bulls are expected to avoid opening aggressive positions. This, in turn, could restrain any further gains from the GBP/USD pair. So it is reasonable to wait for some substantial continuation buying to take place before placing for any short-term upside above the critical psychological level of 1.3000.

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