GBP/USD weaker around 1.2100 amid looming Brexit uncertainty
|- Pound sold-off into increased no-deal Brexit risks, US-UK trade woes.
- Unabated USD demand despite falling Treasury yields weigh on Cable.
- UK PM Johnson’s meeting with Macron and Merkel eyed.
The GBP/USD pair consolidates the 45-pips sharp drop seen in the European opening trades, as the sellers continue to hold ground near the 1.21 handle amid growing Brexit uncertainty.
PM Johnson reiterates commitment to deliver Brexit by Oct 31
The pound remains under pressure, as the UK PM Johnson remains firm to deliver a Brexit with or without a deal on or before October, 31st. Hard Brexit fears continue to mount after the European Union (EU) negotiators ruled out any renegotiation of the withdrawal agreement, including Johnson’s request to remove the Irish backstop.
Meanwhile, Johnson’s hour-long telephonic conversation with the Irish PM Leo Varadkar on Irish border issue also ended in a stalemate. On Monday, the Labour Party leader Corbyn said that they will do everything necessary to stop a disastrous no-deal Brexit, adding, "we will include the option to remain in the EU in any future EU referendum they hold."
The UK political scenario is getting uglier by each day and so does the outlook for the Sterling, despite the GBP bulls having enjoyed a temporary relief last week on upbeat UK inflation, wages and retail sales numbers.
Meanwhile, on the USD-side of the equation, the greenback remains supported near three-week tops vs. its main competitors on easing Fed rate cut expectations while lingering US-China trade fears continue to feed into the safe-haven US dollar.
In the session ahead, the pair will remain at the mercy of the USD dynamics, in absence of relevant fundamental drivers, while trade and Brexit-related development will play a key role ahead of PM Johnson’s meetings with the French President Macron and German Chancellor Merkel scheduled later this week.
GBP/USD Technical levels to watch
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