GBP/USD breaches 1.2800 support, weakest since June 28

The GBP/USD pair attempts to chew offers near 1.2830 levels failed on yet another occasion, sending the rate to the lowest levels since June 2017.

GBP/USD: Risk-off weighs

The spot extended losses for the second straight session and went onto hit fresh eight-week lows at 1.2796 levels, as a renewed risk-aversion wave gripped the European markets on the latest reports of a fire alert triggered at a bank station in Central London.

Moreover, the European traders also react negatively to the US President Trump’s remarks on government shutdown, adding further to the risk-off moods prevalent across the financial markets.

Furthermore, relentless buying seen in the EUR/GBP amid renewed broad EUR strength, in the wake of stronger Eurozone PMI releases and ECB President Draghi’s remarks, also collaborates to the ongoing sell-off in Cable.

The GBP/USD pair also ignores broad based US dollar weakness, as risk-off sentiment continues to drive fx markets, in absence of fresh economic drivers from the UK docket today.

Later today, the pair will also take cues from the US flash PMI reports and new home sales data for near-term trading opportunities ahead of tomorrow’s UK Q2 GDP data and Jackson Hole Symposium.

GBP/USD levels to consider             

Haresh Menghani, Analyst at FXStreet writes, “bears would now be eyeing for a follow through weakness below the 1.2800 handle, below which the pair is likely to accelerate the fall towards an intermediate support near mid-1.2700s. The pair could eventually break below the 1.2700 handle and test 50% Fibonacci retracement level support near the 1.2685-80 region ahead of the very important 200-day SMA near the 1.2650 region.” 

“On the flip side, any recovery attempts back above the 1.2825-30 region now seems to confront resistance at 100-day SMA, near the 1.2880 region. Any subsequent up-move beyond the 1.2900 handle might remain capped at 1.2920-30 heavy supply zone,” Haresh adds.