GBP/USD: Sell-off gains traction as Brexit lingers, targets 1.3300

Dhwani Mehta FXStreet

The Osborne-led rally met fresh supply at 1.3475 levels, knocking-off the GBP/USD pair nearly 130 pips lower to fresh daily lows on 1.33 handle.

GBP/USD blood bath resumes?

Currently, GBP/USD slumps -2.41% to 1.3349, having struck fresh daily lows at 1.3340 last minutes. The cable got once again sold into lingering concerns over the future economic prospects of UK, not being a part of the EU now. Moreover, with almost a recession being priced-in by the markets, the capital flows into the economy is expected to get affected, which also acts as a big drag on the pound.

Ahead of the European open, the major rallied to 1.3475 in a knee-jerk response to the UK Chancellor Osborne’s speech, in which he noted that the BOE, Treasury and FCA have contingency plans in place and stood quite confident that the UK is ready to confront future from position of strength.

However, the upside was short-lived and the cable was slammed after the European stocks also resumed the sell-off amid renewed uncertainty triggered by the Brexit decision. Looking ahead, markets continue to closely monitor Brexit-related news flow and key meetings lined up later today.

GBP/USD Levels to consider

The pair has an immediate resistance at 1.3431/50 (daily pivot), above which 1.3475/1.35500 (daily high/ round number) would be tested. On the flip side, support is seen at 1.3340 (daily low) below that at 1.3308 (daily S2).

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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