GBP/USD tumbles to lows, around mid-1.3100s on Brexit concerns

Haresh Menghani FXStreet

• The incoming Brexit continue to influence the price action surrounding GBP crosses.
• Resurgent USD demand/cross driven weakness further adds to the bearish pressure.

The GBP/USD pair extended its sharp intraday slide and tumbled around 120-pips from the post-UK jobs data swing high level of 1.3269.

The latest UK political headlines, wherein Labour party members were said to support the amendment offered by rebel Tory MPs to keep Britain in the customs union after Brexit raised concerns about the UK PM Theresa May's future and prompted some aggressive selling around the British Pound.

This coupled with resurgent US Dollar demand, amid expectations about an upbeat economic outlook from the Fed Chair Jerome Powell's semiannual congressional testimony, added to the downward pressure surrounding the major.

The ongoing sharp decline could also be attributed to some cross-driven weakness, steaming out of a sudden spike witnessed around the EUR/GBP cross. Meanwhile, technical selling below 100-hour SMA and the 1.3200 handle could also be one of the factors aggravating the bearish pressure.

Today's mixed US economic data - industrial production and capacity utilization rate, did little to lend any support, albeit the pair now seems to have found some support near mid-1.3100s.

Technical levels to watch

A follow-through selling has the potential to drag the pair back towards the 1.3100 handle en-route YTD lows support near the 1.3050 region. On the upside, the 1.3200 handle now seems to act as an immediate resistance and is followed by 1.3235-40 horizontal zone, above which the pair is likely to aim back towards conquering the 1.3300 round figure mark.

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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