GBP/USD: fears of a hard-Brexit keep the Pound subdued

Valeria Bednarik FXStreet

GBP/USD Current price: 1.2540

Conservative MPs will vote this Tuesday again to keep reducing the candidates' list.
Boris Johnson didn't attend the televised debate.

The Pound was among the worst performers against the greenback, falling to 1.2552 a level not seen since last January. Despite US data fell short of the market's expectations, preventing the greenback from extending its gains against other rivals, Sterling self-weakness weighed more. The UK's political uncertainty was the main reason behind the decline as, Jeremy Hunt, one of the candidates for Tories' leadership, was on the wires saying that is possible to renegotiate the Brexit deal, even despite EU authorities denied such option multiple times. Six out of the seven remaining candidates participated in a live televised debate, with the favorite, Boris Johnson, being the absent one. Conservative MPs will have another ballot this Tuesday, and the list will be reduced by at least one, with those with less than 32 votes also being removed from the next round of voting. There are no macroeconomic releases scheduled in the UK, although BOE's Governor Carney is set to participate in a panel discussion at the ECB Forum on Central Banking.

The GBP/USD pair posted a lower low and a lower high for a third consecutive day, a sign that bears retain control on the pair. Now hovering around its May low, the short-term picture is bearish, as, in the 4 hours chart, the 20 SMA has crossed below the 100 SMA, gaining bearish strength, while technical indicators resumed their declines well into negative ground after correcting oversold conditions reached earlier in the day. The RSI is back into oversold territory, with no signs of changing course while the Momentum holds far from its daily low, both in line with more slides coming.

Support levels: 1.2510 1.24751.2440

Resistance levels: 1.2605 1.2630 1.2670

View Live Chart for the GBP/USD

Author

Valeria Bednarik

FXStreet

Valeria Bednarik was born and lives in Buenos Aires, Argentina. Her passion for math and numbers pushed her into studying economics in her younger years.

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