GBP/USD struggling near multi-month lows, bears eyeing 1.2800 mark

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   •  Brexit jitters continue to dent sentiment surrounding the British Pound.
   •  Labour Party to vote against May’s Withdrawal Bill and does little to help.

The GBP/USD pair held on the defensive through the mid-European session and is currently placed at three-month lows, around the 1.2820 region.

The fact that the UK cross-party talks have failed to find any solution to the current Brexit impasse continued taking its toll on the British Pound and kept exerting some downward pressure on the major.

The sentiment deteriorated further after the UK opposition’s Brexit spokesman Keir Starmer said that Labour Party will vote against the Withdrawal Agreement Bill if there is no deal with the government.

It is worth reporting that after failing to get parliament’s approval three times, the government now plans to put the UK PM Theresa May’s Brexit deal before the parliament for yet another vote in early June. 

Meanwhile, the UK PM Theresa May’s spokesman crossed the wires in the last hour and reiterated that there will be more Brexit talks with Labour in the coming days, though did little to inspire the bulls. 

Even a subdued US Dollar price action and intraday turnaround in the global risk sentiment did little to lend any support, albeit turned out to be one of the key factors limiting the downside amid oversold conditions.

A relatively thin US economic docket – featuring the second-tier releases of housing market data, the usual initial weekly jobless claims and Philly Fed Manufacturing Index, also seems unlikely to provide any respite. 

Hence, a follow-through weakness, led by some fresh technical selling below a short-term trend-line support extending from early-March through late-April swing lows, now looks a distinct possibility.

Technical levels to watch

As Yohay Elam, FXStreet’s own Analyst writes: “GBP/USD is battling the 1.2830, which was a swing low in February. Another trough from that month, 1.2775, is a critical support line. Below, the next level to watch is 1.2670 that provided support in January.” 

“Resistance awaits at 1.2870, which was the low point in April. 1.2895 and 1.2925 were the limits of a range the pair traded in last week. 1.2970 and 1.2990 are next up,” he added further.

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