GBP/USD tumbles to lows, below mid-1.3100s

Haresh Menghani FXStreet

• Trump’s Brexit comments prompt some fresh weakness on Friday.
• Persistent USD buying further aggravates the selling pressure.

The GBP/USD pair lost some additional ground during the early European session and has now dropped to 1-1/2 week lows, below mid-1.3100s.

Brexit headlines continue to drive sentiment surrounding the British Pound, with today's comments by the US President Donald Trump prompting some fresh selling on the last trading day of the week.

Trump, during his first official visit to the UK, said the PM Theresa May's new plan for a business-friendly soft-Brexit will leave it too close to the EU and probably kill prospects of any new deal with the US.

Even comments from the UK Foreign Office minister, Alan Duncan, saying that the white paper won't kill prospects of US-UK deal also did little to ease the bearish pressure surrounding the major.

Meanwhile, the US Dollar caught some fresh bids on Friday and was supported by overnight hawkish comments by the Fed Chair Jerome Powell, which eventually exerted some additional downward pressure.

The latest leg of sharp slide over the past couple of hours could also be attributed to some technical selling, following a break below an important support marked by short-term descending trend-channel formation on the 1-hourly chart.

Technical levels to watch

Immediate support is pegged near the 1.3100-1.3095 region, below which the pair is likely to accelerate the slide back towards YTD lows support near mid-1.3000s. On the flip side, the trend-channel support break-point, near the 1.3165 area, now seems to act as an immediate resistance and any subsequent recovery might now be capped at the 1.3200 handle.

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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