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Fundamental Forex Analysis

GBP/USD slides to over 2-week lows, farther below 1.30 handle

  • GBP/USD remains depressed for the fifth consecutive session on Monday.
  • Weaker UK macro data added to no-deal Brexit fears and weighed on the GBP.
  • Technical selling below 1.30 handle further accelerates the intraday downfall.

The GBP/USD pair weakened farther below the key 1.30 psychological mark and dropped to over two-week lows during the early European session on Monday.

The selling pressure surrounding the British pound remained unabated on the first day of a new trading week, rather picked up some additional pace following the release of mostly disappointing UK macro data.

Dismal UK macro data further weighed on the pound

In fact, the UK economy unexpectedly contracted by 0.3% November as compared to a flat reading expected. Adding to this, the UK manufacturing and industrial production also missed expectations by a big margin.

This comes on the back of market concerns that the UK will crash out of the European Union at the end of this year and kept exerting pressure on the major for the fifth consecutive session on Monday.

Apart from this, possibilities of some short-term trading stops being triggered on a sustained break below the 1.30 handle might have prompted some technical selling and further collaborated to the pair’s downfall.

It will now be interesting to see if the pair is able to find any support at lower levels or the ongoing slide marks a fresh bearish breakdown, setting the stage for a further near-term depreciating move for the major.

Technical levels to watch

 

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