GBPUSD: 1.32 THRESHOLD MAINTAINED IN PARITY AMID BREXIT TURMOIL
While positive expectations for Brexit kept the Sterling side strong, it was announced that the negotiations were suspended for a short time after the Covid-19 test of the European Union Chief Negotiator Barnier was positive. Although the parity increases were suppressed a little after this development, GBPUSD parity continues to maintain its appearance above the 1.32 level. This morning, the European Union negotiator made a statement to the ambassadors that the Brexit agreement with the UK was close on some issues, but that it remained different in 3 main issues.
While retail sales in the UK increased by 1.2 percent on a monthly basis, it expanded by 5.8 percent on an annual basis compared to the previous month. Over time, the British Finance Minister announced that it is correct to provide the UK's public finances in a sustainable way. The UK government's debt reaching a record level of £ 214.9 billion in the first seven months of the fiscal year stands out as another factor that increases the uneasiness about the economy.
If we look at the US side, after the increasing cases of Covid-19, face-to-face education stopped again in New York, while a curfew was declared in California. However, on the other hand, it is seen that the positive news flow regarding vaccination studies triggered the risk appetite in the markets. While this development causes a loss of value on the dollar side, it is also seen that the uncertainties preserved over the US fiscal stimulus package increase the tension on the dollar side. Thus, it is seen that the depreciation of the dollar asset assets accelerated the upward trend in the parity.
In the GBPUSD parity, we are following the rises that may occur with the prices climbing above 1.3250, within the framework of 1.34 and 1.3515 resistance levels. Especially with 1.35 resistance, an important breakpoint in the medium term can be crossed in the parity. In the contrary scenario, it is useful to consider 1.32 and 1.3155 support levels depending on the acceleration of the decreases in the parity.