GBP/USD bounces off lows, still in the red around mid-1.2800s

GBP/USD witnessed a sharp turnaround from 1-1/2-week tops, around mid-1.2900s.
Pessimistic Brexit-related headlines took its toll on the sterling and exerted pressure.
A softer tone surrounding the USD failed to impress the GBP bulls or lend any support.

Haresh Menghani FXStreet

The GBP/USD pair tumbled to fresh session lows, around the 1.2820 region in the last hour, albeit quickly recovered few pips thereafter.

Following an early uptick to over one-week tops, the pair witnessed a dramatic turnaround from mid-1.2900s and was pressured by pessimistic Brexit-related headlines. The British pound started losing ground after EU and UK reportedly failed to close differences in the latest round of Brexit trade talks and remained split on the issue of state aid.

The bearish pressure aggravated further in reaction to the news that the legal action against the United Kingdom is imminent and that a draft "letter of formal notice" has been finalised. The European Commission President Ursula von der Leyen will make a statement on Brexit at 09:00 GMT this Thursday and announce legal action against the UK.

On the economic data front, the UK Manufacturing PMI was revised down to 54.1 for September from 54.3 estimated previously. The data did little to provide any respite to the GBP bulls. Even a softer tone surrounding the US dollar – amid the prevalent upbeat market mood – failed to lend any support to the GBP/USD pair or ease the bearish pressure.

Apart from Brexit developments, traders on Thursday will take cues from the US macro data. The US economic docket features the release of Initial Weekly Jobless Claims, core PCE Price Index and the ISM Manufacturing PMI.

Technical levels to watch

GBP/USD

Overview
Today last price	1.285
Today Daily Change	-0.0071
Today Daily Change %	-0.55
Today daily open	1.2921

Trends
Daily SMA20	1.2915
Daily SMA50	1.3028
Daily SMA100	1.2751
Daily SMA200	1.2719

Levels
Previous Daily High	1.2943
Previous Daily Low	1.2806
Previous Weekly High	1.2967
Previous Weekly Low	1.2676
Previous Monthly High	1.3482
Previous Monthly Low	1.2676
Daily Fibonacci 38.2%	1.289
Daily Fibonacci 61.8%	1.2858
Daily Pivot Point S1	1.2837
Daily Pivot Point S2	1.2753
Daily Pivot Point S3	1.27
Daily Pivot Point R1	1.2974
Daily Pivot Point R2	1.3027
Daily Pivot Point R3	1.3112

Author

Haresh Menghani

FXStreet

Haresh Menghani is a detail-oriented professional with 10+ years of extensive experience in analysing the global financial markets.

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