“¢ Persistent USD buying interest prompts some fresh selling on Monday.
“¢ Brexit worries weigh on GBP and add to the downward momentum.
“¢ Technical studies indicate an extension of the near-term bearish slide.
The GBP/USD pair maintained it’s heavily offered through the early North-American session and touched a fresh 11-month low in the last hour.
The pair kept losing ground for the third consecutive session and pushed through previous YTD lows, set on July 19. A combination of negative forces exerted some additional downward pressure at the start of a new trading week and dragged the pair to its lowest since September 5th 2017.
The US Dollar remains supported by Fed rate hike expectations and escalating trade spat between the world’s two largest economies. The British Pound was further weighed down by reemerging Brexit worries; especially after the UK trade minister Liam Fox, on Friday, highlighted that a no-deal Brexit is the most likely outcome now.
The no-deal Brexit speculation gathered more momentum on Monday following the UK government spokesman, James Slack’s comments during the early European session, which prompted some fresh selling around the major.
The bearish pressure now seems to have abated a bit, only for the time being, with the pair bouncing around 15-20 pips from an intraday low level of 1.2920. It would now be interesting to see if the pair is able to find any further support or continues with its bearish slide amid absent market moving economic releases.
Technical Analysis
The pair has been trending lower alongside a downward sloping trend-channel formation on the short-term chart. With RSI (14) on the daily chart still holding above oversold territory, a follow-through downfall, even below the 1.2900 handle, now looks a distinct possibility.
The bearish momentum is likely to get extended towards testing the descending trend-channel support, currently near the 1.2865 region, where bearish traders are likely to take a brief pause.
Share
