“¢ DUP lawmaker flags potential no-deal Brexit outcome and prompts some fresh selling.
“¢ Subdued USD demand helps limit immediate sharp downfall, at least for the time being.
“¢ May’s meeting with Cabinet ministers eyed for fresh Brexit update and trading impetus.
Having touched a fresh two-week high level of 1.3085, the GBP/USD pair met with some fresh supply and has now drifted into negative territory.
The latest leg of sudden drop of around 50-60 pips over the past hour or so followed comments by a lawmaker from the Northern Ireland’s Democratic Unionist Party (DUP) Donaldson, saying that it “looks like we’re heading for no deal Brexit”.
This comes on the back of earlier comments by the UK Trade Minister Liam Fox, noting that there are still a number of Brexit issues that need to be dealt with and it is impossible to say if Brexit deal can be reached this month or next.
Further downside, however, seemed limited, at least for the time being, with the pair holding comfortably above the key 1.30 psychological mark amid a subdued US Dollar price-action ahead of the overhyped US midterm election later in the day.
Traders also seemed reluctant to place any aggressive bets and preferred to wait for some fresh Brexit update from the UK PM Theresa May’s meeting with the Cabinet ministers on the Irish border backstop.
Technical levels to watch
Any subsequent fall is likely to find support near the 1.30 handle, below which the pair is likely to accelerate the corrective slide back towards the 1.2965-60 strong horizontal support. On the flip side, the 1.3050-60 area now seems to act as an immediate resistance, which if cleared should assist the pair to aim towards reclaiming the 1.3100 handle.
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