GBP/USD accelerates downslide, plummets to fresh multi-week lows
The British Pound remained under intense selling pressure, with the GBP/USD pair tumbling to fresh multi-week lows near mid-1.2100s.
Spot extended its rejection move from the 1.2300 handle touched on Monday and traded with bearish bias for the third consecutive session. UK PM Theresa May's second defeat on the Brexit bill in the House of Lords on Tuesday added on to renewed Brexit worries and has been a key factor for persistent selling pressure around the major.
Market participants now think that a further delay in triggering Article 50 would keep the British Pound under selling pressure and could extend the pair's sharp reversal from late Feb. highs near mid-1.2500s.
Meanwhile, a fresh leg of up-surge in the US treasury bond yields continue to underpin the US Dollar demand and collaborating the pair’s ongoing downslide for eighth session in the previous nine. Increasing likelihood that the Federal Reserve will eventually raise interest-rates at its upcoming policy meeting on March 14-15 has been supportive of the prolonged bullish momentum in the US treasury bond yields.
Market focus now turns to the UK government's Spring Budget, where assessment of the British economy would be looked upon for some immediate respite for the major.
Today's US economic docket, featuring the release of ADP report and Revised Nonfarm Productivity data, would act as key determinants for the pair's movement during the NA session.
Technical outlook
Valeria Bednarik, Chief Analyst at FXStreet notes, “the risk remains towards the downside, as in the 4 hours chart, the price remains contained by a bearish 20 SMA, currently around 1.2235, whilst technical indicators head south, despite the RSI indicator is currently in oversold territory. Further slides below 1.2150, expose the 1.2110 level, en route to 1.2080. Above 1.2200, the pair can correct higher, with 1.2235 and 1.2260 being the intraday resistances to follow. Approaches to this last will likely attract selling interest.”