GBP/USD drops below 1.25 as Scottish parliament backs a second referendum
|The GBP/USD has found itself under renewed selling pressure as Scottish First Minister Nicola Sturgeon's motion calling for a new independence referendum in late 2018 or 2019 passed by 69 votes in favor and 59 votes against.
After breaking below 1.25, the pair refreshed its daily low at 1.2470 and is now down %0.65 at 1.2477. Additionally, the US Dollar Index, led by the strong performance of the yield on the benchmark 10-year U.S. Treasury note, leaped to 99.30, putting further pressure on the pair. As of writing, the U.S.10-Year bond yield is up more than 1% at 2.4%.
Following the Scottish parliament's voting outcome, UK government said that they wouldn't be entering into negotiations and it would be unfair to ask the people of Scotland to make a crucial decision like that without the necessary information about UK's future relationship with EU. Although Theresa May insisted that it wasn't the right time for a second referendum, Sturgeon argued that when Article 50 of the Lisbon Treaty is triggered tomorrow, change for Scotland at that point becomes inevitable.
Article 50 to be triggered: "So what now?" - Westpac
Technical outlook
A break below 1.2450 (Fib. 61.8% of Dec/Jan drop) could open the doors for 1.2415 (50-DMA/100-DMA) and 1.2340 (Mar. 21 low). On the upside, the first hurdle is located at 1.25 (psychological level) followed by 1.2560 (Mar. 27 high) and 1.2670 (Jan. 26 high).
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.