- The incoming Brexit-related headlines weighed heavily on the British Pound.
- The USD bullish run remained uninterrupted and added to the bearish bias.
- Extremely oversold conditions might trigger some short-covering bounce.
Selling pressure around the British Pound picked up the pace in the last hour, with the GBP/USD pair crashing farther below the 1.2300 handle for the first time since March 2017.
The latest leg of a sudden drop of over 50-pips followed the new UK PM Boris Johnson's comments, reiterating his stance to leave the EU on October 31 and that if our partners are not ready to move on the backstop then we have to get ready for a no-deal Brexit.
This comes on the back of earlier remarks by Irish minister Donovan, saying that the EU cannot change its position on the backstop, which continued fueling speculations that the UK will crash out of the EU without a deal and exerted some heavy pressure on the British Pound.
The pair tumbled to levels below mid-1.2200s, or fresh 29-month lows, and was further pressurised by the prevalent bullish sentiment surrounding the US Dollar, which remained support by Friday's stronger-than-expected US GDP growth figures for the second quarter of 2019.
However, extremely oversold conditions on hourly charts helped find some support at lower levels amid absent relevant market moving UK/US economic releases, though any meaningful recovery attempted might still be seen as a selling opportunity.
Technical levels to watch
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended content
Editors’ Picks
EUR/USD rises toward 1.0800 on USD weakness
EUR/USD trades in positive territory above 1.0750 in the second half of the day on Monday. The US Dollar struggles to find demand as investors reassess the Fed's rate outlook following Friday's disappointing labor market data.
GBP/USD closes in on 1.2600 as risk mood improves
Following Friday's volatile action, GBP/USD pushes higher toward 1.2600 on Monday. Soft April jobs report from the US and the improvement seen in risk mood make it difficult for the US Dollar to gather strength.
Gold gathers bullish momentum, climbs above $2,320
Gold trades decisively higher on the day above $2,320 in the American session. Retreating US Treasury bond yields after weaker-than-expected US employment data and escalating geopolitical tensions help XAU/USD stretch higher.
Addressing the crypto investor dilemma: To invest or not? Premium
Bitcoin price trades around $63,000 with no directional bias. The consolidation has pushed crypto investors into a state of uncertainty. Investors can expect a bullish directional bias above $70,000 and a bearish one below $50,000.
Three fundamentals for the week: Two central bank decisions and one sensitive US Premium
The Reserve Bank of Australia is set to strike a more hawkish tone, reversing its dovish shift. Policymakers at the Bank of England may open the door to a rate cut in June.