GBP/USD: Sell-off to Gather Pace at London Open?
GBP/USD is now trading with moderate losses with traders fearing an early wobble in London following Duncan Smith’s resignation over the weekend.
Politics back in focus
Iain Duncan Smith’s resignation is a big loss to Cameron. Smith resigned as Secretary of State for Work and Pensions after Chancellor George Osborne announced proposed cuts to disability benefits. Markets are of the opinion that Smith would throw in his weight behind Brexit campaign and hence Pound could take an early hit.
As of now there are signs the selling is gathering pace. The pair also gapped lower in Asia, which could be an indication the news may have been priced-in to some extent.
On the data front, UK calendar is empty. In the US, second tier data releases would be followed by Fed’s Lockhart speech.
GBP/USD Technical Levels
The spot is trading around 1.4422 with immediate hurdle at 1.4436 (Mar 11 high), above which gains a re-test of 1.45 handle looks likely. A break higher would expose 1.4533 (50% of 1.5230-1.3835). Conversely a break below immediate support at 1.44 would expose 1.4252 (50% of 1.4669-1.3835) and 1.4173 (Mar 8 low).
(Market News Provided by FXstreet)
