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GBP / USD falls to fresh daily lows, with bears targeting the 1.2900 level

  • GBP / USD is struggling to preserve its intraday gains and falls to new daily lows.
  • Lingering uncertainties related to Brexit continue to weigh on the GBP.
  • A softer tone around the USD does little to help the bulls or offer support to the pair.

The pair GBP/USD has fallen more than 60 pips from the highs of the European session and has fallen to fresh daily lows, around the 1.2920-15 region in the last hour.

The prevailing selling bias around the US dollar, amid uncertainty about the next round of US fiscal stimulus measures, has helped GBP / USD regain some positive traction on Tuesday. The rally, however, has lacked a strong follow-up and has run out of steam near the 1.2975-80 region amid lingering Brexit-related uncertainties..

In the latest news on Brexit, the European Commission has released an official statement, being ready to intensify talks with the UK. The statement also confirmed that the EU’s chief Brexit negotiator, Michel Barnier, will speak with his British counterpart, David Frost, later this Tuesday. If successful, trade talks could resume as of tomorrow.

On the other hand, the British Prime Minister’s spokesman has withdrawn that the resumption of talks could only happen if the EU fundamentally changes its approach and make it clear that you have. Given disagreements over access to fishing and competition issues, the comments have hit the British pound and sparked further selling around the GBP / USD pair.

From a technical perspective, the inability of the pair to capitalize on the positive move and subsequent pullback point to the emergence of some new selling at higher levels. With that said, it will still be prudent to wait for solid continuation selling below the 1.2865-60 support before positioning for any further bearish moves.

When it comes to economic data, the disappointing release of U.S. housing starts, which hit 1,415,000 in September, was largely offset by slightly better-than-expected building permits, which rose to 1,553,000 during the reported month. The data had little influence on the GBP / USD pair, as the focus remains on the news around Brexit and events related to the US fiscal stimulus.

Credits: Forex Street

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