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GBP/USD tumbles to fresh 7-week lows, below mid-1.2800s

   “¢   Resurgent USD demand prompts some aggressive selling in the last hour.
   “¢   Brexit uncertainties continue to weigh on GBP and did little to stall the fall.

A fresh wave of greenback buying interest emerged during the early North-American session and dragged the GBP/USD pair below mid-1.2800s to seven-week lows in the last hour.

After a rather muted reaction the mixed US durable goods orders report, the US Dollar regained positive traction and rallied to fresh two-month tops. Resurgent USD demand was further supported by a goodish pickup in the US Treasury bond yields and seems to have prompted some aggressive selling around the major.  

Adding to this, possibilities of some stops being triggered, and (or) fresh technical selling, below Asian session lows support near the 1.2880 region could also be one of the factors aggravating the selling pressure and behind the pair’s latest leg of sharp fall of around 40-45 pips over the past hour or so.

The pair has now drifted into negative territory for the third session in the previous four and has failed to find any meaningful buying interest amid persistent Brexit uncertainties. Hence, a follow-through weakness, towards September monthly lows support, now looks a distinct possibility.

Technical levels to watch

Immediate support is pegged near the 1.2820-15 region and is closely followed by the 1.2800 handle, below which the fall could further get extended back towards challenging YTD lows in the near-term. On the flip side, any meaningful recovery attempt might now confront immediate resistance near the 1.2880 area and is likely to be capped near the 1.2900-1.2920 supply zone.

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