The EU’s chief negotiator met the UK’s David Frost yesterday. After months of digital discussions, the pair finally met a few weeks ago to discuss Britain’s exit from the bloc face-to-face. For further Brexit talks. Also, the pair is where to go for dinner yesterday night. And the next awaited update is Chancellor Sunak’s fiscal budget.

Chancellor Sunak’s budget will be delivered after Prime Minister’s Questions in parliament on Wednesday, where he’s expected to announce a package of measures for the economic recovery after restaurants and pubs reopened at the weekend following the relaxation of restrictions on other businesses last month.  One measure to support young people includes a £2billion investment in thousands of six-month work placements for 16 to 24-year-olds. Mr. Sunak admitted that youngsters will be hit hardest by the downturn because they work in sectors hammered by the pandemic.

The Brexit negotiations will continue through the week and although progress is yet to be officially acknowledged, there have been indicators to show something in the pipeline. British Prime Minister (PM) Boris Johnson is ready to accept the Australia-style trade deal, in a call with the German leader Angela Merkel. However, the bloc remains sturdy on its demands for “level-playing field”, fisheries and jurisdiction boundaries. This adds to the expectations of what is about to happen.

Corona virus cases in UK also started to decline as compared to the previous months. China recently has criticized the British ban on Huawei but it did not affect the market sentiment giving no positive response. On the other hand, the US increased standards for Chinese diplomats’ visas. It is also thinking to undermine the Hong Kong dollar peg in a move to punish Beijing.

GBP/USD 4 Hour Chart:

Support: 1.2473 (S1), 1.2403 (S2), 1.2344 (S3).

Resistance: 1.2603 (R1), 1.2662 (R2), 1.2732 (R3).

In this risk-prone market, Brexit and Chancellor Sunak’s fiscal updates expectation creates hopes for sterling among the investors. We expect a bullish trend for Cable (GBP/USD).