GBP/USD plummets to 3-month lows near 1.2850 on latest Brexit headlines

  • Labour spokesman says gaps remain between Labour and government.
  • Retail sales decline in April in the U.S.
  • US Dollar Index clings to daily gains despite the disappointing data.

After piercing through the 1.29 mark, the GBP/USD pair extended its slide and touched its lowest level since February 15 at 1.2852 in the last hour. As of writing, the pair was trading a couple of pips above that level, losing 0.4% on a daily basis.

The latest headlines surrounding cross-party Brexit talks in the UK seem to be weighing on the British pound. A spokesman for the opposition Labour party in the last hour told reporters that gaps remained between the Labour Party and the government in Brexit talks. "We have made it clear that we cannot support the Brexit legislation without an agreement," the spokesman reiterated. Although the fact that the Brexit vote is expected to take place in the first week of June shows that there is still time for sides to come to an agreement, markets don't seem to be convinced that a positive outcome is likely in the near-term.

On the other hand, British Prime Minister Theresa May's spokesman said that discussions with lawmakers across the House to seek to build a majority to pass the Brexit legislation were ongoing.

Meanwhile, the U.S. Census Bureau today reported that retail sales in April declined by 0.2% to fall short of the market expectation for an increase of 0.2%. Nevertheless, the US Dollar Index largely ignored this data and was last up 0.1% on the day at 97.65, making it difficult for the pair to stage a recovery.

Later in the session, the Fed's industrial production and capacity utilization from the U.S. will be looked upon for fresh catalysts.

Technical levels to consider

The pair could face the initial support at 1.2800 (psychological level) ahead of 1.2770 (Feb. 14 low) and 1.2710 (Jan. 8 low). On the upside, resistances are located at 1.2920 (daily high), 1.2960 (200-DMA) and 1.3000 (psychological level/50-DMA).

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.

Feed news

Latest Forex News

Editors’ Picks

EUR/USD extends gains to 1.1200 on sliding US yields, weak data

EUR/USD is trading close to 1.1200, in the wake of the European session as US yields continue falling. The European Parliament elections are in play. US durable goods fell short of expectations with -2.1%. 


GBP/USD off the highs as May announces stepping down on June 7th

GBP/USD is trading below 1.2700 after a quick rise to the upside as UK PM Theresa May announced she will step down on June 7th with Boris Johnson set to take over.


USD/JPY extends slide and looks for a test of May’s low

The USD/JPY pair dropped further ahead of the London fix on the back of a decline of the US Dollar across the board and a pullback in equity prices. 


Gold: Bullish flag pattern spotted on 1-hourly chart

The lower end of the descending trend-channel coincides with 200-hour EMA support and should act as a key pivotal point for intraday traders. 

Gold News

The market may surprise on the upside in the next few hours with BTC/USD topping $8,250

We reach the end of a week can be characterized as a week of transition. After the strongly bullish days of the beginning of the month, cryptos have reached critical levels of resistance...

Read more