GBP/USD under pressure, tests weekly lows at 1.3300
|- Pound remains weak ahead of Brexit next phase of talks.
- Greenback gains momentum on renew optimist about tax reform.
The GBP/USD pair continued to decline during the American session after the greenback gained momentum on the back of some optimism about the US tax reform that followed yesterday’s concerns. The DXY printed a fresh high at 93.88.
Cable bottomed recently at 1.3303, matching Tuesday’s low. So far, it lost a hundred pips on Friday. Most of the losses came from a decline of the pound across the board affected by Brexit concerns
The negative sentiment about Brexit emerged after the EU leaders agreed to move talks to next stage. Those negotiations will be about trade and the transition period. They are likely to be more complex and difficult than the first phase and will take place in an environment surrounded by uncertainty in the UK.
Technical levels to watch
To the downside, the key support is the 1.3300 area; a break lower would sent the pair to the lowest since November 28. The next potential support might lie at 1.3280 (Nov 20 high) and 1.3225/30 (Oct 23 & 24 high). On the upside, resistance levels could be seen at 1.3340 (US session high), 1.3390 (Dec 14 low) and 1.3445 (Dec 15 high).
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