US dollar seems to be somewhat strong in the prevailing environment of growing uncertainty about US fiscal stimulus and the potential for a breakdown in Brexit talks. Surge in the COVID 19 cases in Eurozone also weighs on the market sentiment and US consumption data are eyed ahead of the weekend.

President Donald Donald Trump wants a large relief package Congress, above $1.8 trillion already offered. However, Senate Republicans are willing to allow for only $500 billion and House Democrats want $2.2 trillion.

UK Prime Minister Boris Johnson is set to announce his decision on whether to continue or abandon talks on future relations.EU leaders agreed to extend talks with the UK but did not say they would “intensify them.” Moreover, Brussels expects a move from London to state aid and fisheries. Britain’s Chief Negotiator David Frost expressed disappointment.

“Surprised by suggestion that to get an agreement all future moves must come from UK,” Frost, who casts Brexit as a revolution that has brought the nation state back into focus, said. “It’s an unusual approach to conducting a negotiation.”

With time nearing to the election, chances are falling and the safe-haven dollar is on the rise while stocks are hesitating. Former Vice-President Joe Biden maintains his large lead in national and opinion polls against Trump. Both men participated in parallel televised town hall events which probably did little to move the needle. Democrats have a better chance of winning the Senate, opening the door to a quick and large stimulus that investors want. However, the race for the upper house is tighter and markets also fear higher taxes and regulation.

GBP//USD 4 Hour Chart:

Support: 1.2860 (S1), 1.2805 (S2), 1.2721 (S3).

Resistance: 1.2999 (R1), 1.3084 (R2), 1.3139 (R3).

Brexit uncertainty disappoints the cable traders and we expect a bearish trend for GBP/USD.