GBP/USD gives up gains as Brexit optimism fades

The GBP/USD pair has pulled back from the 1.2560 area where it seems to have found some resistance, resuming its downward path after enjoying some relief over the previous two days.

GBP/USD dragged down by Brexit uncertainty

The British Pound rallied on Thursday after the UK Parliament voted in favor of an amendment that prevents the Prime Minister to suspend the Parliament and allow the UK to leave the European Union (EU) without a deal. However, overall uncertainty remains high on the Brexit matter, with the EU and the UK unable to agree on the terms of the exit.  

Since the Brexit vote took place more than three years ago, the Pound has come a long way down, although alternating upward and downward cycles, having lost more than 16% against the Dollar to this day. 

Next week, on July 23rd, the new UK Prime Minister will be announced. Since Theresa May's resignation, the candidates have been narrowed to two - Jeremy Hunt and the favourite Boris Johnson. Both candidates have said that May's deal is "dead" and want to renegotiate the terms of the Brexit with the European Union. 

GBP/USD technical levels

At time of writing, GBP/USD is trading at the 1.2480 area, down 0.54% on the day and recording a 0.73% weekly loss. Next support levels are seen at 1.2381 (two-year low, Jul 17), 1.2365 (Apr 2017 monthly low) and not much until 1.2300 (next psychological level). On the other hand, resistances on bounces could be faced at the 1.2557-67 area (Jul 18 high/20-day SMA), 1.2648 (Jul 2 high) and then 1.2705 (monthly high Jul 1).