Search ForexCrunch

   “¢     Persistent Brexit uncertainties continue to weigh on the British Pound.
   “¢   The USD remained support supported by Dec. Fed rate hike expectations.
   “¢   A fresh wave of risk-off trade provides an additional boost to the greenback.

The GBP/USD pair extended its sharp intraday retracement slide and dropped to fresh session lows, around mid-1.2700s in the last hour.

The pair’s intraday upswing to levels just above the 1.2800 handle met with some aggressive supply, with a goodish pickup in the US Dollar demand turning out to be one of the key factors exerting some fresh downward pressure since the early European session.

The greenback remained support by the latest FOMC meeting minutes, reaffirming prospects for additional rate hike move in December, and got an additional boost from a fresh wave of global risk-aversion trade.  

Investors turned nervous ahead of the crucial trade-related talks between the US President Donald Trump and China’s Xi Jinping at the G20 summit this weekend, which was eventually seen underpinning the greenback’s relative safe-haven status.  

It, however, remains to be seen if bears are able to maintain their dominant position and drag the pair back towards yearly lows or bulls continue to show resilience ahead of the 1.2700 handle amid persistent  Brexit uncertainties.  

Meanwhile, a scheduled speech by New York Fed President John Williams and the release of Chicago PMI might provide some impetus and help traders grab some short-term opportunities on the last trading day of the week.

Technical outlook

Mario Blascak, FXStreet’s own European Chief Analyst writes: “The short-term cap is at the current level of mid 1.2700s with the further potential of sliding lower to 1.2700 first before targeting the cyclical bottom of 1.2662. Before the UK parliament passes the Brexit agreement, chances are for the uncertainty to prevail keeping Sterling under pressure.”