“¢ The lack of progress in the UK cross-party Brexit talks continues to weigh on the GBP.
“¢ Continuous deterioration in risk sentiment benefits USD and adds to the selling bias.
“¢ Technical selling below the 1.30 handle now seems to aggravate the bearish pressure.
The GBP/USD pair finally broke down of its Asian session consolidation phase and dropped to 1-1/2 week lows in the last hour, farther below the key 1.3000 psychological mark.
After an initial uptick to an intraday high level of 1.3026, the pair turned lower for the fourth consecutive session on Thursday and extended its recent pullback from one-month tops set last Friday. The British Pound remained on the defensive amid the lack of progress in the UK cross-party talks to break the Brexit deadlock.
This coupled with deteriorating risk sentiment, amid escalating US-China trade tensions and further aggravated by the news that North Korea fired unidentified projectiles, prompted some safe-haven flows towards the US Dollar and contributed to the pair’s latest leg of a downslide over the past couple of hours.
The pair now seems to have found acceptance below the 1.30 handle and hence, a follow-through weakness, led by some fresh technical selling, now looks a distinct possibility amid persistent Brexit uncertainties and absent relevant market moving economic releases from the UK.
Later during the early North-American session, the US economic docket – featuring the release of April PPI figures, March trade balance data and the usual initial weekly jobless claims, along with a scheduled speech by the Fed Chair Jerome Powell will be looked upon for some short-term trading opportunities.
Technical levels to watch
Any subsequent slide now seems to find some support near the very important 200-day SMA, around the 1.2960 region, below which the pair is likely to accelerate the fall further towards testing the 1.2915 support zone. On the flip side, the 1.3025-30 region now seems to have emerged as an immediate resistance, which if cleared might lift the pair further towards the 1.3050-60 supply zone en-route the 1.3100 round figure mark.
Share
