GBP/USD retreats from multi-week tops, slides farther below mid-1.2400s

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  • Risk-aversion trade benefitted the USD’s safe-haven status against its British counterpart.
  • The incoming Brexit-related headlines further collaborated to the pair’s intraday slide.
  • Investors now look forward to Monday’s Juncker-Johnson meeting for a fresh impetus.

The GBP/USD pair extended its intraday pullback from multi-week tops and dropped to fresh session lows, around the 1.2425 region in the last hour.
 
The pair, for the second straight session on Monday, struggled to build on its recent strong positive momentum further beyond the key 1.2500 psychological mark and witnessed some long-unwinding trade. A fresh wave of the global risk-aversion trade, triggered by escalating geopolitical tensions in the Middle East, benefitted the US Dollar’s relative safe-haven status against its British counterpart and exerted some initial downward pressure on the major.

Brexit headlines continue to influence

Meanwhile, the latest leg of a sudden fall over the past hour or so could further be attributed to some incoming Brexit-related headlines. As BBC Europe Editor Katya Adler reports, the UK PM Boris Johnson’s current negotiation offer for Backstop replacement – to work out the border issue with technology – lacked any specific details and cannot be agreed by the EU, which eventually seemed to undermine the British Pound.
 
Meanwhile, a sharp intraday pullback in the US Treasury bond yields kept a lid on any meaningful up-move for the greenback and helped limit further losses ahead of Monday’s scheduled Brexit talks between the UK PM Johnson and European Commission President Jean-Claude Juncker in Luxembourg. In absence of any major market-moving economic releases, the incoming Brexit-related news/developments might continue to influence the pair’s momentum on the first day of a new trading week.

Technical levels to watch

 

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