GBP/USD under pressure as Brexit optimism losing luster

GBP/USD drops in Asia on fading Brexit optimism.
BOE'sability to counter economic slowdown may be hampered by Brexit delay.
The UK firms may be forced to cut down jobson prolonged Brexit uncertainty.

Omkar Godbole FXStreet Contributor

GBP/USD is facing selling pressure in the Asian session and may remain on the defensive in Europe on fading optimism for the Brexit deal.

The Pound is being offered, possibly in response to the comments by Britain and the European Union on Sunday that a lot more work would be needed to secure an agreement on Britain's departure from the bloc.

Further, a Deloitte survey warned that Brexit uncertainty will force the UK firms to reduce hiring over the next 12 months, possibly adding to the selling pressure around the GBP. Also, the Bank of England's Ramsey told The Telegraph on Sunday that the central bank's ability to support the economy would be hampered if Brexit is delayed again.

So, the probability of the British Pound facing another wave of selling in the European session is high. The dip, however, could be reversed if the Brexit-related news flow is positive. Kathy Lien from BK Asset Management sees Sterling rising to levels above 1.28 as both sides are seeing the light at the end of the tunnel three weeks ahead of the Brexit deadline of Oct. 31.

The currency pair is currently trading near 1.26, representing 0.37% losses on the day, having hit a high of 1.2645 in Asia. The pair clocked a high of 1.2707 on Friday on Brexit optimism.

Technical levels

GBP/USD

Overview
Today last price	1.26
Today Daily Change	-0.0048
Today Daily Change %	-0.38
Today daily open	1.2648

Trends
Daily SMA20	1.2382
Daily SMA50	1.2272
Daily SMA100	1.2413
Daily SMA200	1.2715

Levels
Previous Daily High	1.2707
Previous Daily Low	1.2408
Previous Weekly High	1.2707
Previous Weekly Low	1.2194
Previous Monthly High	1.2583
Previous Monthly Low	1.1958
Daily Fibonacci 38.2%	1.2593
Daily Fibonacci 61.8%	1.2522
Daily Pivot Point S1	1.2468
Daily Pivot Point S2	1.2288
Daily Pivot Point S3	1.2168
Daily Pivot Point R1	1.2768
Daily Pivot Point R2	1.2887
Daily Pivot Point R3	1.3067

Author

Omkar Godbole

FXStreet Contributor

Omkar Godbole, editor and analyst, joined FXStreet after four years as a research analyst at several Indian brokerage companies.

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