GBP/USD Forecast: Worries over a no-deal Brexit to continue weighing on the British Pound

The GBP/USD pair fell to fresh YTD lows at the start of a new trading week and was being weighed down by renewed fears of a hard Brexit. Talks of no-deal Brexit heated up after the UK trade minister Liam Fox, in an interview with the Sunday Times, ascribed a 60% chance of no deal. Adding to this, the UK government spokesman said that Fox is right to say there is a risk of no-deal outcome and that the PM May still believes no deal is better than a bad Brexit deal.

Meanwhile, the prevalent US Dollar bullish sentiment exerted some additional downward pressure and dragged the pair below its previous YTD lows support near the 1.2960-55 region. In absence of any major market moving economic releases, either from the UK or from the US, the incoming Brexit-related headline might continue to drive sentiment surrounding the British Pound and influence the price movement. 

Looking at the technical picture, overnight downslide marked a fresh bearish breakdown and thus, has opened room for an extension of the ongoing bearish trajectory. A follow-through selling has the potential to continue dragging the pair towards the 1.2900 handle and the downfall could further get extended towards testing a short-term descending trend-channel support, currently near the 1.2875-70 region.

On the upside, the previous yearly lows, around the 1.2955-60 region, now becomes the immediate hurdle and is followed by resistance near the 1.2975 level, above which the pair is likely to reclaim the key 1.30 psychological mark and aim towards testing the 1.3030-40 supply zone.