GBP/USD refreshes session lows, back below 1.2500 handle

News of potential ministerial resignations exerts some pressure in the last hour.
Tempered Fed rate cut bets underpins the USD and added to the selling bias.

Haresh Menghani FXStreet

The GBP/USD pair finally broke down of its Asian session consolidation phase and dropped to fresh session lows, around the 1.2475 region in the last hour.

The latest leg of a sudden drop of over 35-pips, dragging the pair farther below the key 1.2500 psychological mark came in reaction to the UK political headlines, suggesting that the ministerial resignations could begin later this Monday.

It is worth reporting that UK chancellor of the exchequers Phillip Hammond, along with the Secretary of State for Justice and Lord Chancellor David Guake stand ready to resign if Boris Johnson - the frontrunner, becomes the next British PM.

On the other hand, the US Dollar remains supported by St. Louis Fed President James Bullard's comments on Friday, saying that a 25 bps rate cut seems appropriate as the current US economic condition doesn't warrant a larger cut.

The downside, however, remained limited, at least for the time being, as investors still seemed reluctant to place any aggressive bets ahead of the Tory leadership voting results, expected to be announced on Tuesday, and absent relevant economic data.

Hence, it would be prudent to wait for a strong follow-through selling before traders start positioning for the resumption of the pair's well-established bearish trend and a possible move back towards challenging 27-month lows set last Wednesday.

Technical levels to watch

GBP/USD

Overview
Today last price	1.248
Today Daily Change	-0.0023
Today Daily Change %	-0.18
Today daily open	1.2503

Trends
Daily SMA20	1.2569
Daily SMA50	1.2646
Daily SMA100	1.2868
Daily SMA200	1.2875

Levels
Previous Daily High	1.2557
Previous Daily Low	1.2476
Previous Weekly High	1.2579
Previous Weekly Low	1.2382
Previous Monthly High	1.2784
Previous Monthly Low	1.2506
Daily Fibonacci 38.2%	1.2507
Daily Fibonacci 61.8%	1.2526
Daily Pivot Point S1	1.2467
Daily Pivot Point S2	1.2431
Daily Pivot Point S3	1.2387
Daily Pivot Point R1	1.2548
Daily Pivot Point R2	1.2593
Daily Pivot Point R3	1.2629

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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