GBP/USD sees 1.2506 traded, lowest since April 2017, bears now looking to April lows

At the same time, markets are in risk-off mode with US stocks crumbling, extending losses since last Friday's nonfarm payrolls disappointment. However, the greenback is picking up on flow, breaking back into the 97 handle in an impressive recovery considering slower U.S. job growth was reported for November and lower prospects for rate hikes in 2019 and beyond. The bulls will be looking for a punchy CPI print this week, although with UK politics in focus, and considering the state of which they are, cable is fundamentally in the hands of the bears.

Brexit and UK data weighing

The European Court of Justice ruled on Monday the British government may reverse its decision to leave the European Union without consulting other member states, but while the government insists that this is not an option and that they will never reverse the decision to leave the EU, then fears of a hard Brexit, or even worse, a Brexit as it stands under the current deal PM May has come home with, is keeping the pound on the backfoot. As for data, well that too has been a weight - (UK Oct manufacturing output -0.9 pct vs flat f/c. UK Oct GDP +0.1 pct, as expected).

GBP/USD levels

Support at 1.2662, the August low, and 61.8% Fibonacci retracement of the 2016-2018 advance and the June 2017 low at 1.2593/89 gave way and 1.2500 has now been traded. The April 2017 lows are the next objective for the bears - 1.2367. RSI is fully supportive of such a move on both a weekly and daily basis. Bulls need to get back above 1.2780 at this juncture.