GBP/USD remains under pressure, near 1.2900

  • Cable’s recovery finds resistance at 1.2960 and falls toward 1.2900.
  • US Dollar remains the top performer, DXY breaks above 98.00. 

The GBP/USD fell earlier today to 1.2914, reaching a fresh 2-month low. It bounced later, but the recovery was capped by 1.2960 and now is back into negative territory for the day, looking at the 1.2900 zone. 

The bearish pressure remains intact, favored over the last hours by a stronger US Dollar. The DXY rose traded above 98.00 for the first time since May 2017. While GBP/USD managed to hold above daily lows, EUR/USD tumbled to 1.1150. 

Regarding Brexit and UK politics, the media reported today that talks between the government and the opposition are near collapse and later, that UK PM Theresa May survived an attempt to change Conservative Party rules to make it possible to oust her in weeks but they demand of a clearer timetable on her departure if her Brexit deal fails to pass. The uncertainty around UK politics and Brexit remains in place despite the recent extension and weighs on the Sterling. 

The greenback remains strong in the market even despite the rally in equity prices and lower US yields, supported by US economic data and the dovish shift in many central banks. Regarding data, the next key report in the US will be on Friday with the first estimate of Q1 2019 GDP. 

Levels to watch 

To the upside, immediate resistance might be seen at 1.2960 (American session high), 1.2985 and 1.3020. On the flip side, below 1.2910/15 (daily low), the next support could be located at 1.2895 and then at 1.2830. 

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