The British pound is on the back foot once again. GBP/USD fell below the lows seen in late December and now trades at levels last visited in October, just after the flash crash.
Sterling is also lower against the euro and the yen, and it’s all due to Brexit fears. Over the weekend, new dark clouds have gathered.
From the north, Scotland’s First Minister Nicola Sturgeon stated that “she is not bluffing” about the chances of second Independence Referendum for Scotland in the case of a “hard Brexit.” Voters in the 2014 poll opted to stay in the UK also due to Britain’s participation in the European Union. In the EU Referendum of 2016, Scottish voters undoubtedly voted to Remain in the union.
Also, UK PM Theresa May responded to criticism about her government’s so-called “muddling” of the process and rejected it. The UK’s former EU ambassador Rogers resigned with rage. He was quickly replaced, but the echoes from his leaked resignation letter continued echoing.
While May wanted to assure her fellow citizens that everything is under control, she did create worries when she talked about her priorities: immigration control. Favoring more monitoring of entrants into the UK over participation in the single market is not what markets wanted to hear.
GBP/USD dropped to a low of 1.2165, the lowest since October 31st and below the 1.2170 level last seen in late December. Further support awaits at 1.21, also seen back in October. Resistance is at 1.22, 1.23 and 1.2380.
Here is how it looks on the pound/dollar chart:
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