GBP/USD tumbles to session lows near 1.3050
- Cable moves lower and approaches the 200-day SMA.
- UK Construction PMI dropped to 50.6 in January.
- Brexit negotiations expected to resume this week.
The offered bias around the British Pound remains well and sound at the beginning of the week and is now dragging GBP/USD to fresh daily lows in the mid-1.3000s.
GBP/USD weaker, challenges 200-day SMA
The selling mood in Cable has intensified today after UK’s Construction PMI dropped to 50.6 for the month of January, more than initially forecasted and down from December’s 52.8.
The pair is retreating for the third day in a row today, although the critical 200-day SMA in the 1.3050 area appears to be holding well the downside pressure for the time being.
With less than 60 days for the Brexit deadline (March 29), both EU and UK officials continue to point blaming fingers to each other while not even a hint of an agreement appears on the horizon. The UK Parliament will have the next key vote on February 14, where a potential deal to Article 50 could be on the cards (as well as a ‘hard Brexit’ scenario).
GBP/USD levels to consider
As of writing, the pair is losing 0.09% at 1.3062 facing the next support at 1.3043 (200-day SMA) seconded by 1.2955 (21-day SMA) and finally 1.3001 (high Jan.17). On the other hand, a break above 1.3217 (2019 high Jan.25) would open the door to 1.3257 (monthly high Oct.12 2018) and then 1.3298 (monthly high Sep.20 2018).
Author
Pablo Piovano
FXStreet
Born and bred in Argentina, Pablo has been carrying on with his passion for FX markets and trading since his first college years.
