GBP/USD Forecast: Gains to 1.3350 amid Brexit Optimism, Eyes BoE

• The GBP/USD pair breaks its four-day downtrend to bounce off a yearly low.
• Until talks collapse, Britain won’t trigger Article 16; EU’s Sefcovic will visit London on Friday for negotiations.
• According to UK experts, covid cases are expected to surge in the New Year, despite a decline in deaths caused by viruses.

The GBP/USD forecast remains slightly positive as the Greenback retraces a little while the pound cheers Brexit optimism on the day. On Thursday, the GBP/USD price consolidated recent losses near an 11-month low, hitting 1.3350 ahead of London’s open.

Cable’s recent rally could be attributed to the US dollar’s retreat amid a sluggish Asian session, but a recent quote also confirms hopes of a breakthrough on Brexit.

Reuters reports that despite a significant gap between UK and EU views on Northern Ireland, UK Prime Minister Boris Johnson’s willingness to work hard to resolve the problem is encouraging to the market. Nevertheless, British politicians have also agreed to wait until negotiations break down before applying Article 16.

Bloomberg also noted positive progress in the Brexit negotiations. David Frost, the Brexit Minister, wants a major overhaul of the existing treaty, whereas Maros Sefkovic, the Vice President of the European Commission, wants concessions under the existing arrangement. In addition, the UK and the Eurozone discussed assistance in the event of medical aid being transported through Northern Ireland. They hoped to resolve this issue before EU Representative Shefkowicz visited the UK on Friday.

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Furthermore, lower US Treasury yields were also positive for the GBP/USD prices following the recent decline in US inflation expectations, as measured by the St. Louis Federal Reserve System (FRED) 10-year break-even inflation rate.

Health experts cite a recent rise in Coronavirus infections to 43,676 and 149 deaths to indicate a new spike in Coronavirus cases after the recent decline in deaths.

Throughout these games, stock futures prices are gently tracked by the 10-year US Treasury yield of the first negative close of three the previous day. In response to BoE Governor Andrew Bailey’s Thanksgiving remarks, the US dollar (DXY) is rebounding from a 16-month high, feeding further recovery in GBP/USD.

In light of recent improvements in UK employment and inflation data, as well as the improved November preliminary PMI data, BOE’s Bailey may reaffirm his bullish stance on rate hikes and help GBP/USD extend a corrective pullback. However, policymakers may face challenges regarding Covid, which could lead to a delay in the Brexit quote before tomorrow’s important talks.

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GBP/USD price technical forecast: Shallow pullback to find more sellers

The GBP/USD price is struggling around the mid-1.3300. The recent pullback may be resisted by the 20-period SMA on the 4-hour chart around the 1.3370 area. So far, the average daily range is 36% which is a little higher than usual. Volume does not support the pullback, which means that the sellers can dominate anytime.