- US Dollar gains momentum on the back of stock market sell-off.
- Cable remains under pressure but holds above 1.2800.
The GBP/USD pair dropped to 1.2813, hitting a fresh daily low amid a stronger US dollar. The pair trades near the lows, under bearish pressure but still above 1.2800.
A sell-off in Wall Street boosted the demand for the US dollar and pushed cable modestly lower. The Dow Jones is down almost 2% and crude oil falls more than 4%. The risk aversion tone increased over the last hours and offset Brexit headlines. The DXY rose to 96.50, erasing Monday’s losses.
The BoE and the UK government are confident about reaching a deal, but the fact is that no deal has been agreed yet and negotiations still look complex, creates uncertainty about the outcome as March 2019 approaches. Volatility in pound’s crosses appears to be granted during the next weeks, particularity affected by Brexit headlines.
GBP/USD Levels to watch
To the downside, the immediate support is seen at 1.2800, followed by 1.2790 (Nov 19 low), 1.2750 and 1.2720/25 (Nov 15 low). On the flip side, resistance might be located at 1.2840 (Asian session low), followed by the strong 1.2880/85 area (Nov 16, 19 and 20 high) and 1.2945.
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