GBP/USD flirting with lows, back closer to 1.30 handle

Haresh Menghani FXStreet

• Renewed Brexit concerns prompt some fresh selling at the start of a new week.
• A goodish pickup in the USD demand exerts some additional downward pressure.

The GBP/USD pair extended its intraday retracement slide from 100-day SMA and has now erased all of Friday's goodish rebound from two-week lows.

The pair's early European session uptick quickly ran out of steam ahead of the 1.3100 handle, with a combination of negative factors prompting some fresh selling at the start of a new trading week.

The UK PM Theresa May's proposal to extend the transition period as an alternative to a backstop met with some serious criticism by pro-Brexit members of her own party.

A growing rebellion against May's Brexit plans fueled speculations over an immediate threat to her leadership and was seen as one of the key factors weighing heavily on the British Pound.

This coupled with a goodish pickup in the US Dollar demand exerted some additional downwards pressure and dragged the pair back closer to the key 1.30 psychological mark.

In absence of any major market moving economic releases, the pair remains at the mercy of incoming Brexit-related news ahead of May's Brexit update in the Commons later today.

Technical levels to watch

A sustained break through the 1.30 handle might now be seen as a fresh bearish trigger and accelerate the downfall towards 1.2935 intermediate support en-route the 1.2900 round figure mark.

On the upside, the 1.3065-70 region might now act as an immediate resistance, which if cleared might lift the pair beyond 100-day SMA hurdle, near the 1.3090 region, towards testing the 1.3145-50 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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