GBP/USD sees aggressive selling below 1.2600 on notable USD demand

• Fresh USD buying, Brexit backstop uncertainty drags the Cable lower.
• A breach of hourly 100-SMA at 1.2602 opens the floor for further downside.
• USD bulls await US retail sales data for further trading momentum.

The GBP/USD pair came under heavy selling pressure on a breach of the hourly 100-SMA support placed at 1.2602 and now prints fresh two-day lows at 1.2570, as the bears regain poise amid resurgent US dollar demand across its main competitors.

The bid tone around the US dollar keeps growing bigger in the European session, largely on the back of a sharp fall in the EUR/USD pair to the 1.13 handle after weak French, Eurozone and German manufacturing PMI readings that confirm ECB”s concerns on the economic outlook.

Further, looming uncertainty over the Irish border backstop and the latest comments by the UK PM Theresa May’s Deputy David Lidington  collaborates to the bearish tone around the Cable.

In the day ahead, the bulls could be rescued only by the disappointing US retail sales data due later in the NA session at 1330 GMT. Until then, the USD dynamics and broader market sentiment will continue to drive the GBP/USD price-action.

GBP/USD Technical Levels