GBP/USD plummets to mid-1.3100s on Brexit headlines

Haresh Menghani FXStreet

Having touched over one-week high level of 1.3265, the GBP/USD pair turned sharply lower and tumbled over 100-pips since early European session.

The pair came under intense selling pressure after Michel Barnier, the EU's chief negotiator, during a joint Brexit press conference, said that they haven't made much progress and Brexit talks have reached deadlock.

Meanwhile, UK's Brexit minister David Davis was also noted saying that the UK government is planning for all scenarios and if good deal is not possible, government has to be ready for the alternative.

Adding to this, a modest pickup in the US Dollar demand, despite the post-FOMC minutes weaker tone around the US Treasury bond yields, took along some stops near the 1.3200 round figure mark further collaborated to the pair's sharp slide to 1.3140 level, or fresh session lows.

Next on tap would be the US economic docket, featuring the release of weekly jobless claims and PPI figures, which along with Fedspeaks would now be looked upon for some fresh impetus.

• GBP futures: impending top on sight?

Technical levels to watch

Immediate support is pegged at 50-day SMA, near the 1.3135 region, below which the pair is likely to accelerate the fall towards the 1.3100 handle before eventually dropping to retest 1.3060 support.

On the upside, any recovery attempts might now confront fresh supply near the 1.3200 handle, which if cleared could help the pair to make a fresh attempt towards surpassing the 1.3265 supply zone and aim towards reclaiming the 1.3300 handle.

Author

Haresh Menghani

FXStreet

Haresh Menghani is a detail-oriented professional with 10+ years of extensive experience in analysing the global financial markets.

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