GBP/USD inter-markets: attention shifted to 1.30

Cable is down more than 1% at the time of writing, shedding over two cents from daily highs in the boundaries of 1.3300 the figure to current lows in sub-1.3100 levels. The miserable print from July’s flash Services PMI has been the deterrent to an extension of the bid tone around GBP seen earlier in the session, acting at the same time as a sour reminder that ‘Brexit’ potential consequences may not be as mitigated as markets initially thought.

GBP’s down move is also sustained by a negative performance of yields in the UK money markets, where the short-end and the belly of the curve keep suffering the most so far, all in sharp contrast with their American peers and hence favouring the buck via wider spreads.

Volatility tracked by VIX navigates levels just below 2-day highs, prompting investors to accelerate the flight away from riskier assets.

All in all, the pair’s upside has been so far capped by the 23.6% Fibo retracement of the 1.5020-1.2796 move at 1.3321, opening the door for another test of the psychological support at 1.30 in the next sessions, unless the ongoing USD-rally finds it difficult to get more oxygen to fuel its upside.