GBP/USD: consolidates a hard landing at 1.2390

GBP/USD dumped hard in Asia today on the back of the Scottish referendum proposals.

Prepare for new Scottish independence vote

As reported earlier, the SNP government raised the issue of a second referendum at a private meeting with UK PM May's administration on Wednesday. "The first minister looks set to call a vote by the Scottish parliament — following next month’s SNP conference and triggering of article 50 — to strengthen her mandate to stage a second referendum," reported the Times. GBP/USD has penetrated below the 1.24 handle with a low of 1.2930 where demand came in forcing the bears back to above 1.2420 for the time being.

"During the upcoming days, the House of Lords will discuss amendments for the Brexit bill particularly focused on guarantee the rights of EU citizens to stay in the UK after Brexit and to ensure the Parliament has a binding vote on the final departure deal before it's too late for it to be changed, an effective veto. If PM Theresa May is defeated by parliamentarians the Pound will likely come under selling pressure," explained Valeria Bednarik, chief analysts at FXStreet.

GBP/USD levels

Technically, demand came in where we have seen bulls perform previously ahead of February's lows, 1.2347, that converge with the 50% retracement of the latest bullish run, as noted by Valeria Bednarik as the level to break to confirm a bearish breakout. Meanwhile, analysts at Commerzbank explained that they suspect that prices will need to go sub 1.2250 in order to alleviate immediate upside pressure and trigger losses to the 1.1988/80 recent low. "Immediate support is the 1.2347 February low."

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