The sterling has slumped since Friday as ongoing Brexit concerns weigh on the pound. As recently as Wednesday last week, the GBP/USD was close to breaking through the 1.3200 level for the first time since mid-October. We are currently trading at 1.2921, a drop of 347 pips considering the overnight trading lowest’ price, as worries build about whether a deal between the UK and EU can be sorted on time and if a deal is agreed to, whether it will be automatically approved in the House of Commons.
An agreement between the UK and EU is the only driver of sterling crosses at the moment. To highlight this point, Friday saw the release of Q3 GDP from the UK which saw a very buoyant 0.6% registered, as the latter stages of the World Cup and the summer heatwave helped growth hit its highest level Q4 2016. Despite this normally market-moving release, the sterling barely batted an eyelid and in fact, started to fall throughout the afternoon as Brexit worries once again took hold. This week, UK wage growth, CPI and Retail Sales figures will be published; however, politics will be the markets’ primary focus.
The technical levels to consider for today in the GBP/USD are 1.2800 on the downside and 1.2965 on the upside.