- Mounting fears about a hard-Brexit smashed the Pound.
- Market’s closed amid the Christmas holiday, keeping majors ranging.
- GBP/USD trading at its lowest since early December sub-1.3000.
GBP/USD trades at around 1.2950, having bottomed on Monday at 1.2904, its lowest since December 2. Mounting fears about the UK crashing out of the EU without a deal condemned the Pound, after the House of Commons passed UK PM Johnson ´s Withdrawal Agreement Bill. Johnson n made it unlawful for the government to extend the trade talks beyond December 2020. On Monday, Irish PM Varadkar indicated that the Prime Minister is embarking on a “harder Brexit than we anticipated.”
Hopes and fears to keep leading the way
News this Tuesday indicated that London is expected to co-host the next stage of negotiations with Brussels after January 31, a symbolic act that marks the UK’s position outside the Union. The kingdom will become a third party country on that day and will have less than a year to clinch a trade deal.
Market participants have spent more than three years speculating on the outcome of Brexit, with hopes and fears on the matter dominating the pair. The fact that the UK Parliament has finally passed the deal should have been considered positive if it weren’t by the fact that PM Johnson will deliver at any cost.
Having lost the 1.3000 mark, the risk for the GBP/USD pair has shifted to the downside. The pair is trading close to its December low at 1.2859, the immediate support, followed by the 1.2800 figure. Below this last, the next relevant level is November low at 1.2768. October high at 1.3012 provides resistance, ahead of the 1.3060 price zone.
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