GBP/USD falls to 1-month low, 1.2800 mark back on sight

Haresh Menghani FXStreet

• The USD regained positive traction and prompts fresh selling at higher levels.
• Brexit uncertainties exert some additional pressure and add to the selling bias.

Having posted a session high level of 1.2878, the GBP/USD pair met with some fresh supply and dropped to one-month lows in the last hour.

A fresh wave of US Dollar buying emerged during the early European trading session and was seen as one of the key factors behind the pair's sharp intraday slide of over 60-pips over the past one hour or so.

The greenback remained supported by Wednesday's slightly better than expected US inflation report, showing that the core CPI was up for the third straight month, and more positive news on the trade front.

On Thursday, Bloomberg reported that the US President Donald Trump is considering extending the March 1 tariff deadline by 60 days and added to the recent optimism over a possible resolution of US-China trade disputes.

Meanwhile, the fact that bearish traders have managed to regain control over the British Pound clearly suggest that the market might now be pricing in some negative news coming out of the Brexit debate in the Parliament.

The incoming Brexit-headlines might turn out to be a key driver of the pair's momentum on Thursday, though the release of US monthly retail sales figures might further contribute to produce some meaningful trading opportunities.

Technical levels to watch

Any subsequent slide is likely to find some support near the 1.2800 handle, below which the pair is likely to accelerate the slide further towards its next major support near the 1.2750-40 horizontal zone. On the flip side, any meaningful up-move now seems to confront a strong resistance near the 1.2900 handle, which if cleared might lift the pair back towards the overnight swing high, around the 1.2955-60 supply zone.

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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