“¢ UK political/Brexit uncertainties continue to dent sentiment surrounding the British Pound.
“¢ A modest pickup in the USD demand adds to the offered tone for the third straight session.
The greenback bid tone picked up the pace in the last hour and dragged the GBP/USD pair farther below mid-1.2600s, back closer to multi-month lows.
The pair finally broke down of its Asian session consolidation phase and drifted into the negative territory for the third consecutive session, extending this week’s pullback from the vicinity of mid-1.2700s.
Given the recent UK political turmoil, the fact that Brexit impasse will remain regardless of a new leader and growing concerns about a no-deal Brexit continued denting sentiment surrounding the British Pound.
This coupled with some renewed US Dollar buying interest, despite the ongoing slump in the US Treasury bond yields, further collaborated to the pair’s ongoing slide back closer to multi-month lows – set last Thursday.
Lingering fears of a full-blown trade war between the world’s two largest economies turned out to be one of the key factors benefitting the greenback’s relative safe-haven status against its British counterpart.
In absence of any major market moving economic releases, either from the UK or the US, the pair remains at the mercy of the USD price dynamics and any fresh UK political/Brexit-related news/developments.
Technical levels to watch
According to Yohay Elam, FXStreet’s own Analyst, “initial support is around 1.2605 where the PP 1w-S1 and the previous weekly low converge. The downside target is 1.2540 where we see the PP one-month S3 and the BB 1d-Lower meet.”
“The Technical Confluences Indicator shows that GBP/USD is facing substantial resistance. The first level to watch is 1.2671 where the Simple Moving Average 100-15m meets the Fibonacci 38.2% one-day. The next noteworthy cap is quite close. At 1.2704 we see the convergence of the SMA 200-1h, the Pivot Point one-month Support 2, and the previous day’s high,” he added further.
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