GBP/USD weaker, poised to challenge 1.3100, EU Summit eyed

• Cable extends the downside to the 1.3130 region, 6-day lows.
• BoE expected to leave monetary policy unchanged today.
• Focus remains on May’s visit to Brussels and the EU Summit.

The selling pressure around the Sterling remains unabated in the second half of the week and is now forcing GBP/USD to navigate in fresh weekly lows in the 1.3130 region.

GBP/USD focused on EU Summit

Cable has intensified the leg lower today in spite of auspicious results from the UK retail sector, where both headlines and core Retail Sales expanded more than initially estimated during February.

In fact, Brexit uncertainty has been exacerbated in past hours, particularly after PM Theresa May seeks an extension of Article 50 to June 30, as opposed to EU officials, who said they will not tolerate a delay beyond May 26. This issue should, on the cards, be discussed at today’s EU Summit in Brussels.

Another potential source of conflict for the UK Parliament (and extra uncertainty for the Brexit negotiations) seems to be emerging today, as over 700K UK citizens are favouring a revocation of Article 50.

What to look for around GBP

The British Pound came under increasing selling pressure after PM Theresa May asked the EU for a short extension of Article 50, as opposed to MPs’ expectations of a longer one. In addition, the third meaningful vote on May’s Brexit deal at the House of Commons has been postponed and there is still no date for the event.

GBP/USD levels to consider

As of writing, the pair is losing 0.41% at 1.3128 and a breach of 1.3028 (55-day SMA) would expose 1.2982 (200-day SMA) and finally 1.2960 (low Mar.11). On the other hand, the next hurdle emerges at 1.3311 (high Mar.19) seconded by 1.3350 (high Feb.27) and then 1.3380 (2019 high Mar.13).