GBP/USD plummets to fresh multi-month lows, closer to mid-1.2400s
- The USD remains supported by tempered Fed rate cut expectations and exerted some pressure.
- Comments by Irish Finance Minister fueled fears of a no-deal Brexit and added to the selling bias.
The GBP/USD pair finally broke down of its Asian session consolidation phase and dropped to fresh multi-month lows, around the 1.2470-65 region in the last hour.
The US Dollar remained well supported by the fact that investors have been scaling back expectations for an aggressive policy easing by the Fed at its upcoming meeting on July 30-31, especially after Friday's upbeat headline NFP print for June.
Meanwhile, the British Pound was weighed down by speculations that the BoE will soon join other major central banks in easing monetary policy and persistent fears of a no-deal Brexit, reinforced by the latest comments by Irish Finance Minister.
Ireland’s Finance Minister Donohoe recently cross the wires saying he is very confident that the new EU leaders will continue to show support to Ireland in Brexit talks but also warned that the prospect of disorderly Brexit is now a significant risk.
The already weaker sentiment deteriorated further following the release of the latest Bloomberg survey of economists, forecasting that the UK economy probably contracted for the first time in 7 years during the second quarter of 2019.
The pair already seems to have found acceptance below the key 1.2500 psychological mark and hence, a follow-through weakness, led by some fresh technical selling amid the UK political and economic uncertainty, now looks a distinct possibility.
Later during the early North-American session, scheduled speeches by influential FOMC members - including the Fed Chair Jerome Powell, will now be looked upon for fresh clues about the central bank's policy outlook and produce some meaningful trading opportunities.
Technical levels to watch