“¢ Brexit-led UK political chaos continues to dent sentiment around the British Pound.
“¢ The USD remains supported by the Fed’s patient stance and adds to the selling bias.
“¢ Bearish traders seemed unaffected by highly oversold conditions on short-term charts.
Selling pressure around the GBP/USD pair picked up the pace in the last hour, with bears now eyeing a follow-through weakness below the 1.2600 handle.
The pair extended its recent bearish trajectory and kept losing ground through the early European session on Thursday, falling to fresh 4-1/2 month lows amid the recent Brexit-related UK political chaos.
High profile UK lawmakers have reportedly revolted against the UK PM Theresa May’s revised version of the Withdrawal Agreement Bill and might now put pressure on her to resign as soon as today.
The resignation by the House of Common Leader and a Tory member Andrea Leadsom further dented the already weaker sentiment surrounding the British Pound and did little to ease the prevailing bearish pressure.
Adding to this, a fresh wave of US Dollar buying interest, supported by the Fed’s patient stance – reaffirmed in the latest FOMC meeting minutes also collaborated to the pair’s ongoing slide to the lowest level since early-Jan.
It would now be interesting to see if the pair is able to find any support at lower levels or continues with its descent despite highly oversold conditions and absent relevant market moving economic releases.
Technical levels to watch
As Yohay Elam, FXStreet’s own Analyst writes: “The round number of 1.2600 is the initial support line. It is followed by 1.2530 which provided support in December, and then by the flash crash low of 1.2435 seen in early January.”
“Resistance awaits at 1.2660 which was a swing low in January, then by 1.2685, a temporary support line from earlier this week, and finally by 1.2710, the closing level last week,” he added further.
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