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  • Brexit worries continue to weigh on the pair.
  • Oversold RSI questions sellers.
  • Lack of major data/events highlights qualitative factors for fresh impulse.

With the EU parliamentary election results exerting pressure on the UK’s frontline lawmakers, the GBP/USD pair remains weak around 1.2650 during early Wednesday.

As expected, the Cable declined on Tuesday with the British traders’ return from holiday finding the Brexit party’s victory as not so amusing.

Adding to the sentiment could be overall risk-off mood at the global markets as soft data from top-tier economies join uncertainty surrounding trade.

The recent victory of the newly found Brexit party in the EU election is likely to add more stringent condition and increase chances of the hard Brexit which seems weighing on the British Pound (GBP) off late.

Increasing the political uncertainty is the latest news from the UK’s Mirror that the Labour party leader Jeremy Corbyn could back second Brexit referendum and soon agree on the new vote.

At the US, President Donald Trump continues to signal tough road ahead for China but the US Treasury’s latest report refrained from mentioning the dragon nation as a currency manipulator, which in turn could ease some tension off the trade pessimism between the world’s two largest economies.

There are no major data/events mentioned on the economic calendar and that makes political headlines even more important for the traders to watch.

Technical Analysis

Latest low surrounding 1.2600 continues to gain sellers’ attention as a break of which could open the door for the pair’s drop to 1.2480 and then to 2019 low near 1.2430. However, 14-day relative strength index (RSI) is against further downturn by being in the oversold region and may trigger the quote’s pullback to 1.2760-70 area including February bottom and a descending triangle stretched since early-May.