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GBP/USD gaps down on Brexit stress, opens the week near 1.29

2018-9-3 11:01:42Basics of Trading
GBP/USD gaps down on Brexit stress, opens the week near 1.29

The GBP/USD major pair opened the new trading week on a bearish note, knocking into 1.2920 amidst a bearish gap that saw the pair slip 45 some odd pips from last Friday's closing prices.


Brexit angst remains the popular theme for Sterling bears as the European Union remains "strongly opposed" to UK Prime Minister Theresa May's latest Brexit proposal, a working project that was nearly dead on arrival when it was introduced back in July.


UK PM May: Will not surrender to Brussels


With the possibility of a no-deal Brexit continuing to rise as political divides continue to grow both outside and within the UK, GBP traders are seeing serious headwinds on a faltering bullish correction, taking the GBP/USD pairing off of last week's high of 1.3043, a four-week high for the major pair, though the weary Pound remains steeply off of 2018's highs of 1.4375 from mid-April.


Monday will be a relatively sedate affair for the GBP/USD, with the UK's latest Markit Manufacturing PMI for August due at 08:30 GMT, expected to tick upwards from 54 to 55, while later in the day at 23:01 will see the BRC's Like-For-Like Retail Sales for the year into August, forecast to clip from 0.5% to 0.3%.


GBP/USD levels to watch


The Sterling has given up the previous week's gains after dropping away from 1.1735, and buyers will be looking to punch in a floor underneath the current sell-off at late August's swing low of 1.1530, but sustained short-side strength could see the Pound continue to gas out and fall into 2018's critical low of 1.1300.