GBP/USD reverses sharply to 1.2850 as Brexit jitters weigh

Short squeeze fizzles as Brexit blues continue to haunt the GBP markets.
To remain at the mercy of the Brexit news ahead of the vote of confidence in the UK PM May due Tuesday.

Dhwani Mehta FXStreet

The pound caught a fresh bid-wave in early trades and broke the consolidation phase to the upside, sending the GBP/USD pair to daily tops near 1.2885, before quickly trimming gains to now trade near the midpoint of the 1.28 handle.

GBP futures: upside limited near term

The sudden bounce in the Cable can be mainly seen as a shorts squeeze, as markets seek to lock-in gains after last week’s extensive sell-off and heading into tomorrow’s critical vote of confidence in the UK PM Theresa May’s leadership.

Meanwhile, fresh selling seen in the US dollar amid a risk-on action on the European equities and Goldman Sachs’ 2019 bearish outlook on the greenback also help the spot to gain some upside traction.

However, wide expectations that the PM May’s Brexit deal is likely to be defeated in the House of Commons, capped the recovery attempts in the major. Further, the increased odds of a no deal Brexit for the UK also continue to keep the bearish pressure intact on the domestic currency.

All eyes remain on the Brexit-related headlines that are likely to create a stir in the fx markets amid a data-empty UK docket while the US calendar also remains relatively sparse.

GBP/USD Technical Levels

GBP/USD

Overview:
    Last Price: 1.2856
    Daily change: 27 pips
    Daily change: 0.210%
    Daily Open: 1.2829
Trends:
    Daily SMA20: 1.2922
    Daily SMA50: 1.3031
    Daily SMA100: 1.3019
    Daily SMA200: 1.3374
Levels:
    Daily High: 1.2878
    Daily Low: 1.2759
    Weekly High: 1.3074
    Weekly Low: 1.2724
    Monthly High: 1.326
    Monthly Low: 1.2696
    Daily Fibonacci 38.2%: 1.2833
    Daily Fibonacci 61.8%: 1.2805
    Daily Pivot Point S1: 1.2765
    Daily Pivot Point S2: 1.2702
    Daily Pivot Point S3: 1.2646
    Daily Pivot Point R1: 1.2885
    Daily Pivot Point R2: 1.2942
    Daily Pivot Point R3: 1.3005

Author

Dhwani Mehta

FXStreet

Residing in Mumbai (India), Dhwani is a Senior Analyst and Manager of the Asian session at FXStreet. She has over 10 years of experience in analyzing and covering the global financial markets, with specialization in Forex and commodities markets.

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