GBP/USD retreats from 6-week tops, dips below 1.3100 handle on Brexit headlines

Haresh Menghani FXStreet

• Labour’s set to vote against PM May’s Chequers Brexit deal.
• Potential leadership challenge adds to the additional pressure.
• Traders now eye the US monthly retails for some fresh impetus.

The GBP/USD pair retreated sharply from six-week tops and weakened back below the 1.3100 handle in a knee-jerk reaction to fresh Brexit headlines.

According to a report published in the Financial Times, the UK’s opposition Labour party is set to vote against the UK PM Theresa May’s Brexit deal. The report also highlighted comments by shadow foreign secretary Emily Thornberry that a lack of a viable Brexit plan could lead to a potential leadership challenge for the UK PM Theresa May.

The report prompted some weakness around the British Pound, with the pair retreating over 50-pips from an intraday high level of 1.3138. The downtick has been limited so far as market participants now look forward to the key US macro release - monthly retail sales data for some fresh impetus.

Technical levels to watch

A follow-through selling could drag the pair further towards 1.3060-50 support area, which if broken might trigger some additional long-unwinding trade and keep exerting downward pressure on the major. On the flip side, the 1.3130-35 area now becomes immediate resistance, above which the pair seems all set to aim towards challenging 100-day SMA hurdle near the 1.3180 region.

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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