GBP/USD Forecast: Irish border deadlock to continue weighing on the British Pound
|On Friday, the GBP/USD pair tumbled over 100-pips from a three-week high level of 1.3258 and ended near the lower end of its daily trading range. Against the backdrop of a modest US Dollar rebound, reemerging Brexit concerns weighed heavily on the British Pound and prompted some aggressive selling around the major. The backstop on the Irish border remained an unresolved issue, which was seen as one of the key factors dragging the pair lower.
The pair gapped lower at the start of a new trading week as it is getting unlikely to have a breakthrough in the sticky issue on the Irish border at the EU summit this week. The selling pressure seems to have abated, at least for the time being, with the pair recovering a part of its early fall and now holding comfortably above the 1.3100 handle. In absence of any major market moving economic releases from the UK, market participants will remain focused on any fresh Brexith news/headlines for some fresh impetus.
Later during the early North-American session, the release of US monthly retail sales data might influence the USD price dynamics and might assist traders to grab some short-term trading opportunities.
From a technical perspective, the pair showed some resilience below 100-day SMA and hence, it would be prudent to wait for a strong follow-through selling before positioning for any further near-term depreciating move. Below the mentioned support, the pair downfall is likely to get extended towards the key 1.30 psychological mark en-route a short-term ascending trend-line support, currently near the 1.2975 region. On the flip side, any subsequent recovery now seems to confront some fresh supply near the 1.3140 horizontal zone, above which the pair is likely to make a fresh attempt towards reclaiming the 1.3100 handle.
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