GBP/USD suffers worst weekly slide since March, still unable to find support
- Pound tumbles across the board amid Brexit concerns.
- GBP/USD drops 500 pips from the level it had a week ago.
The modest recovery on Friday of GBP/USD was short-lived. After finding resistance at 1.2865, the pair dropped back toward the lows, and near the end of the week, it was trading at 1.2780, marginally lower for the day and more than 500 pips below the level it had a week ago.
The pound was the worst performer across the board. It plummeted having the biggest loss since March versus the US dollar. Brexit tensions again were to blame. The lack of perspective for a commercial agreement between the United Kingdom and the European Union pushed the pound sharply to the downside and analysts consider it could continue to slide.
“Despite its profound fall in the past few days, we expect the pressure on GBP to continue building next week as until-recently complacent investors adjust to the new reality of a heightened no-deal Brexit risk and start/continue building GBP shorts,” mentioned analysts at MUFG Bank. They see GBP/USD breaking below the 1.2740 (200-day moving average) next week and heading toward 1.2500.
The Fed and the Bank of England will have their monetary policy meetings, but not much is expected. The focus will likely continue to be dominated by Brexit developments. The Internal Market Bill will be debated at the UK Parliament.
Technical levels