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  • GBP/USD is making fresh lows on the back of continued negative outlooks for the UK economy due to Brexit.  
  • GBP/USD is making its way lower within the bearish channel and is well on its way to the 100% retracement of the mid-August lows.
  • GBP/USD is currently trading at 1.2700 having made a low of 1.2697 from a high of 1.2813.

GBP/USD has been on a one-way street since 11th Oct highs at 1.3258 and Brexit is a major problem for the bulls, especially given the implications that this may have on the BoE, figuring that the uncertainty will be a risk to growth. We have already seen a stagnant August monthly GDP and a declining Sep retail sales as evidence of this weaker momentum, and analysts at TD Securities noted that a recent survey data from the Agents’ Survey was showing diminished investment intentions.

“We expect a 9-0 vote for no change, as the BoE sits on the sidelines until Brexit clarity emerges,” analysts at TDS argued.

Countdown to no deal Brexit, less than 4 weeks away

We need to see a deal agreed in parliament if sterling is going to turn around and at this juncture, it seems a tough ask. With just over 4 months to go until the United Kingdom is due to leave the European Union, negotiations are at what Prime Minister Theresa May has called an impasse. Even if May can clinch a deal with the EU,  her divided Conservative Party could mean that it doesn’t pass through with a parliamentary approval and that means the UK will either leave the EU without a deal, and there would probably be a national election or even another referendum.

GBP/USD levels

Cable is en route to 1.2662 as the Aug low  level. 1.2589 as being the June 2017 low. 1.1985 is the H&S objective below there. Bulls need to get back to 1.2905 where the 23.5% retracement Fib of the channel is located.