GBP/USD shows upward movement this Monday, helped by the upbeat market mood-led additional weakness in the US dollar across its main competitors. The haven demand for the US dollar got almost killed, as euphoria on the corona virus vaccine progress, solid Chinese factory output and Japanese economic rebound lifted Asian equities to record highs. The risk-on mood partly offset concerns over virus cases and restrictions in the US, rendering dollar-negative.

Meanwhile, the higher-yielding pound took advantage of the risk-rally, shrugging off the latest negative developments surrounding the Brexit issue, as the negotiations over a potential trade deal between the UK and EU are likely to extend beyond this week.

With this week being a crucial one for Brexit talks, the UK has now hinted that the negotiations could actually stretch out beyond this week. Both sides have struggled to overcome the key barriers to reaching a trade deal, with fisheries being a major hurdle.

Environment Secretary George Eustice said Sunday it would be possible to “squeeze out extra time” if the two sides were close to an agreement while Britain’s chief Brexit negotiator David Frost said on Sunday that he was heading back to Brussels for more discussions. ”The UK will not be changing its position in the coming talks,” he said.

However, he also explained that ”some progress in a positive direction in recent days,” has been made, but warned that they ”may not succeed.” “This needs to be a week when things move when we break through some of these difficult issues and get a resolution, and at least have some sort of headlines of an agreement,” he said.

In other recent headlines, Ireland’s Foreign Minister Simon Coveney told Sky News, “If UK imposes Internal Market Bill, we won’t get a deal.”

GBP/USD 4 Hour Chart:

Support: 1.3135 (S1), 1.3080 (S2), 1.3052 (S3).

Resistance: 1.3217 (R1), 1.3246 (R2), 1.3300 (R3).

Amidst all the prevailing catalysts, we expect a bullish trend for GBP/USD.