GBP/USD held steady on Monday after retreating from one-month highs hit in Europe as traders assessed key technical resistance and as the UK's looming Oct.
15 Brexit deadline approaches.
Cable has benefited largely from dollar weakness lately as markets follow U.S. COVID-19 relief negotiations, the election campaign and the coronavirus outbreak.
Bullish GBP/USD enthusiasm faces technical challenges ahead of 1.3079, the 50% Fibo of September's 1.3481-1.2676 dip.
Uncertainty over the Brexit endgame also remains a threat, but recent sterling strength indicates that traders expect some sort of deal before the end of the transition period on Dec.
With the Brexit trail littered with extensions and workarounds, GBP/USD traders may, as they did in the summer, continue to follow other currencies higher versus the dollar, albeit more slowly.
A research report by Goldman Sachs nL1N2H30CU foresees near-term dollar weakness as U.S. election and COVID vaccine expectations diminish safe-haven flows. But, if Brexit anxieties produce a close below 30-and 10-day moving average support near 1.2940, a test of daily cloud base support by 1.2867 could follow, facilitating a complete retrace to September lows by 1.2676.
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