Search ForexCrunch

   “¢   Brexit uncertainties continue to dent sentiment surrounding the British Pound.
   “¢   Renewed pickup in the USD demand and further collaborates to the selling bias.
   “¢   Downside seems limited ahead of the closely watched BoE’s Super Thursday.

The GBP/USD pair struggled to build on its early uptick and dropped to fresh two-month lows, around mid-1.2700s in the last hour.

Sentiment surrounding the British Pound remained fragile amid persistent Brexit uncertainties and the latest leg of downfall came following the UK Chancellor of the Exchequer Philip Hammond’s comments, saying that a no-deal Brexit would be a shock to the economy and would require fiscal stimulus.

This coupled with a goodish pickup in the US Dollar demand exerted some additional downward pressure since the early European session on Tuesday. A modest uptick in the US Treasury bond yields lifted the greenback to 10-week highs and further collaborated to the pair’s latest leg of downfall from an intraday high level of 1.2813.

However, in absence of any major market moving economic releases from the UK, and any fresh Brexit-related news/developments, the downside seems more likely to be limited as investors seemed reluctant to place any aggressive bets ahead of this week’s key event risk – BoE’s Super Thursday.

Later during the early North-American session, the release of Conference Board’s consumer confidence index, a key highlight from today’s relatively thin US economic docket, will now be looked upon for some short-term trading opportunities.

Technical levels to watch

A follow-through selling below mid-1.2700s is likely to accelerate the fall towards the 1.2700 handle before the pair eventually drops to challenge YTD lows, around the 1.2665-60 region. On the flip side, any meaningful bounce might continue to confront immediate resistance near the 1.2815-20 region, above which the momentum could further get extended towards mid-1.2800s supply zone.