GBP/USD: bears looking for a break of 1.2200 on "Hard Brexit" fears

Ross J Burland FXStreet

GBP/USD is pressured on'The Times' news and leaked controversial forecasts that Osbourn came up with in April earlier this year.

The media have used this leak to proclaim that if the UK pursues the so-called "hard Brexit" option of leaving the single market and EU customs union, the UK's gross domestic product (GDP) could fall by as much as 9.5 per cent if it leaves the EU and reverts to World Trade Organisation rules.

GBP/USD was recently battered in a flash crash and has remained extremely fragile ever since. 1.2200 could come under pressure this week should Yellen's tone be hawkish while the greenback remains king at the moment, (The US Dollar Index - which tracks the buck vs. its main competitors - keeps the upside intact today and is currently advancing to fresh highs in the mid-97.00s), with EUR/USD also en-route and a few pips away of a break of the mid point of the 1.10 handle and Aug 5th lows as a key support area.

GBP/USD levels

GBP/USD is now in a tight range of 1.2205 and the 1.2500 mark. The real danger will be a break below 1.1938 where analysts at Commerzbank would target the 1.0463 1985 low.

Author

Ross J Burland

FXStreet

Ross J Burland, born in England, UK, is a sportsman at heart. He played Rugby and Judo for his county, Kent and the South East of England Rugby team.

EUR/USD appears supported by the 200-day SMA, for now

Following an early pullback to multi-week lows near 1.1670, EUR/USD now manages to reclaim the 1.1700 region as the NA session draws to a close on Monday. The steep retracement in spot follows the equally strong move higher in the US Dollar, as investors continue to assess the geopolitical landscape in the wake of the US and Israel attacks on Iran.

GBP/USD hits new yearly lows near 1.3300

GBP/USD adds to the recent bearish tone, approaching to the key 1.3300 support to reach fresh YTD troughs against the backdrop of the robust performance of the US Dollar. Indeed, Cable’s decline comes amid the firm demand for the safe-haven space in the wake of the US and Israel attacks to Iran.

Gold clings to gains as US-Iran conflict continues to underpin safe-haven assets

Gold retains positive bias for the fifth consecutive day on Tuesday as rising geopolitical tensions in the Middle East continue to underpin safe-haven assets. However, a bullish US Dollar could keep the bullion below its highest level since late January, set on Monday, warranting caution before positioning for any further appreciation.