GBPUSD has been in a free-fall as of late despite overall weakness of the US dollar. The British pound came under pressure when UK PM Johnson said he wanted a deal with the EU until 15 October or no deal at all. With a list of issues to be resolved (with the Irish border on top of it) it looks unrealistic and markets started to price in a negative scenario of chaos in economic relations with the EU starting from next year. Only yesterday GBPUSD slid by full 200 points.
Fast forward to present and the GBPUSD is trying to rebound from the “last chance support” of 1.2775 – a local high from early June reinforced by 150day moving average. As we can see, the recent slide has already exceeded previous corrections so this could be a make or break for the pair. Buyers got some early momentum from decent manufacturing data for July this morning, but talks with the EU will be critical here.
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