GBP/USD hurt by Brexit, around 1.4200

Pablo Piovano FXStreet

The British pound remains well entrenched into the red territory today, taking GBP/USD to the 1.4200 area for the time being.

GBP/USD attention to Brexit, CPI

Spot dipped to fresh 2-month lows in the 1.4170 area following the opening bell in Asian markets today. A wave of selling interest hit hard GBP in response to heightened jitters on a potential ‘Brexit’ scenario at the EU-UK Referendum next week, as shown by poll results over the weekend.

Apart from ‘Brexit’ stealing almost all the headlines in the UK, it will be an interesting week for GBP in the data space, as CPI results for the month of May are due tomorrow, followed by labour market figures on Wednesday and Retail Sales and the BoE MPC meeting on Thursday.

Regarding positioning, speculative net shorts in GBP have climbed to the highest level since June 2013, up by more than 66K contracts in the week ended on June 7, according to the latest CFTC report.

GBP/USD levels to consider

As of writing the pair is retreating 0.32% at 1.4211 and a break below 1.4158 (low Jun.13) would aim for1.4088 (low Apr.14) and then 1.4004 (low Apr.6). On the other hand, the next resistance aligns at 1.4355 (100-day sma) followed by 1.4415 (55-day sma) and finally 1.4484 (20-day sma).

Author

Pablo Piovano

FXStreet

Born and bred in Argentina, Pablo has been carrying on with his passion for FX markets and trading since his first college years.

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