“¢ Persistent USD buying/reemerging Brexit concerns keep exerting pressure.
“¢ Technical selling below mid-1.3400s further aggravates the downfall.
“¢ This week’s important UK/US releases/events eyed for fresh directional impetus.
The GBP/USD pair continued losing ground through the early European session and momentarily dipped below the 1.3400 handle.
The pair finally broke down of its two-week-old trading range and tumbled to fresh YTD lows, with a combination of factors prompting some fresh selling at the start of a new trading week.
Easing US-China trade tensions provided an additional boost to the already stronger US Dollar. This coupled with reemerging Brexit concerns exerted some additional downward pressure on the British Pound.
Against the backdrop of recent dovish BoE tilt, reports that Nicola Sturgeon will restart debate on Scottish independence in coming weeks was seen as one of the key factors behind the pair’s follow-through weakness on Monday.
Meanwhile, possibilities of some technical selling, following a break below an important support near mid-1.3400s, further collaborated to the pair’s offered tone and slide to its lowest level since December 28.
With an empty economic docket, the USD price dynamics might continue to act as an exclusive driver of the pair’s momentum. Moving ahead, this week’s important releases/events from the UK and the US will help investors determine the next leg of a directional move for the Sterling.
Technical levels to watch
A follow-through weakness below the 1.3400 handle has the potential to continue dragging the pair further towards 1.3375-70 intermediate support en-route its next major support near the 1.3300 handle.
On the flip side, any meaningful recovery attempt is likely to face immediate resistance near the 1.3450 region, above which the pair could make an attempt to reclaim the key 1.3500 psychological mark.
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