GBP/USD drops sharply to 1.2435 on Brexit headlines

Dhwani Mehta FXStreet

After a solid rebound staged a day before, the GBP/USD pair consolidates the strong and gathers pace for further upside amid a risk-friendly market environment.

GBP/USD capped by 1.2500

The major tried several attempts to rise above 1.25 handle in the European session, but in vain, as the sellers kept lurking near the last, knocking-off the GBP/USD pair to fresh daily lows, as markets remain unimpressed by upbeat UK public sector net borrowings data.

The latest leg lower in the cable is mainly attributed to the latest comments on the Brexit negotiations by European Union’s (EU) Verhofstadt, citing that the Brexit process needs to be completed by the next EU parliament elections, i.e., the window for Brexit negotiations is now 14-15 months.

While, a minor-recovery in the US dollar against its major peers on the back of a solid rebound in the 2-year treasury yields, also added to the renewed weakness in the major.

The spot is last seen exchanging hands at 1.2446, retreating slightly from fresh daily low struck at 1.2436 last minutes, still down -0.40% so far.

All eyes remain on Brexit-related news flow, BOE MPC member Forbes’ speech and US existing home sales data for further momentum on the major.

GBP/USD Levels to consider

At 1.2420, the pair finds immediate resistances placed at 1.2515 (daily high), 1.2568 (daily R1) and 1.2600 (zero figure). While supports are lined up at 1.2414 (5-DMA) and 1.2400 (round figure) and below that at 1.2362 (daily S1).

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Author

Dhwani Mehta

FXStreet

Residing in Mumbai (India), Dhwani is a Senior Analyst and Manager of the Asian session at FXStreet. She has over 10 years of experience in analyzing and covering the global financial markets, with specialization in Forex and commodities markets.

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