GBP/USD: Bears in control as EU skepticism grows stronger in EU Parliament

• GBP/USD has fallen from a high of 1.2747 to a low of 1.2667.
• GBP/USD gives back the initial EU election on hard Brexit fears.

The EU Parliamentary elections on the weekend have hurt sterling considering PM May's recent resignation and The Brexit party winning the elections and EU sceptics taking up more seats from other member nations. GBP/USD fell from 1.2747 to a low of 1.2667 today as traders trade the hard Brexit sentiment. 

"With above 30% of seats, Eurosceptic and anti-establishment groups and (nonaligned) parties are estimated to have increased their weight in EU policy making over next five years. But we remain doubtful that these groups will manage to permanently overcome their (many) differences and use their leverage to promote their own coherent policy agenda," - analysts from Deutsche Bank said.

As for recent domestic data, UK April retail sales ex-fuel sales dipped only -0.2%m/m after a revised +1.4%m/m (prior 1.2%m/m) for March. "Better weather and strong online clothing sales offset weakness in high street activity but the real story is that consumers remained active despite Brexit uncertainty," analysts at Westpac explained. 

GBP/USD levels

Analysts at Commerzbank explained that GBP/USD remains under pressure:

"We look for it to hold the downside but acknowledge that it is the last defence for the 1.2444 December 2018 low. Minor resistance at the 1.2772 February low is currently being eyed. Further up sits the 1.2865 April low."