GBP/USD falls to a low of 1.2823
Once again, the 50.0 retracement level @ 1.2877 continues to hold up as price gets rejected at the level for a fourth time since Friday. The 100-hour MA (red line) also acts as a helping hand in providing an added resistance level and by moving back below that, near-term bias in cable remains more bearish.
The pound’s sentiment also isn’t helped by the fact that the euro is struggling and there is word that May won’t even get to lobby any changes to the Brexit deal ahead of the summit in Brussels on Sunday.
European officials have basically left her to the “vultures” to fend for herself as they look to get the deal approved and then throw it back to her to try and win over parliament on her own.
There is some support around the 38.2 retracement level @ 1.2841 but the key downside level for the time being will be that 1.2800 handle. That was where price action to the downside stalled yesterday as well.
Right now, we’re still waiting to hear on fresh developments on the leadership letters but it’ll only be a matter of time before headlines from there start hitting. As long as near-term bias in cable remains more bearish, expect the pound to be vulnerable to any negative headlines and that could result in a break below 1.2800 towards Thursday’s low of 1.2724 again.