GBP/USD rebound losses momentums and drops back to the 1.3150 area
- Lack of progress regarding Brexit negotiations hits the pound.
- Cable heads for the lowest close since August 25, below the 20-day moving average.
The GBP/USD pair bottomed at 1.3139 earlier on Monday, reaching the lowest level since August 26. It then rebounded, finding resistance at the 1.3180 zone. As of writing, it trades at 1.3165, about to post a daily close below the 20-day moving average and the third slide out of the last four trading days. Over the last hours, it has been moving in a small range, on a low volume session due to a holiday in the US.
The pound is under pressure amid lack of progress regarding Brexit negotiations. The UK and the EU clashed on Monday after reports suggested that new legislation in the UK could override the already signed withdrawal agreement.
As the focus turns again to Brexit, with the deadline for the transition period approaching, the pound lost further strength. Last week, GBP/USD reached at 1.3481, the highest level in nine months before reversing.
So far, cable lost more than 300 pips from the recent peak. The correction started with a recovery of the US dollar across the board, but now it gained speed on the back of a weaker pound.
Technical outlook