GBP/USD remains depressed below 1.2700 mark ahead of US data
Our preference: short positions below 1.2800 with targets at 1.2530 & 1.2435 in extension.
Alternative scenario: above 1.2800 look for further upside with 1.3000 & 1.3175 as targets.
No-deal Brexit fears continue to keep a lid on any attempted bounce.
The USD builds on the overnight bounce and adds to the selling bias.
Investors now look forward to the US economic data for fresh impetus.
The GBP/USD pair failed to capitalize on its intraday up-move beyond the 1.2700 handle and quickly retreated around 25-pips in the last hour.
Having dropped to weekly lows, around the 1.2660 region, the pair gained some traction during the early European
session but lacked any strong conviction amid increasing fears of a no-deal Brexit.
The favourite UK PM candidate Boris Johnson’s commitment to leave the EU by October 31st,
even without a deal held the GBP bulls on the sidelines and continued capping the attempted up-moves.
Investors were further discouraged by the BoE Governor Mark Carney’s comments that uncertainty is hurting economic
performance and that the central bank may cut rates in case of a no-deal Brexit.
On the other hand, the US Dollar remained supported by the overnight not so dovish comments by St Louis Fed President
James Bullard and the Fed Chair Jerome Powell, which added to the selling bias.
Meanwhile, the downside remained limited, at least for the time being, as investors now look forward to Wednesday’s key highlight –
the release of US durable goods orders data, for some fresh impetus.