GBPUSD gives up over 120 pips as hard Brexit worries resurfaced. GBPUSD erased almost all of Friday’s gains after the Bank of England kept interest rates unchanged. The European Commission presented earlier a draft mandate for the upcoming negotiations with the UK. The new partnership will be a single package with three main components: a) general arrangements b) economic arrangements (provisions on trade) and c) security arrangements (law enforcement and cooperation in criminal matters).
Meanwhile in a speech by PM Boris Johnson about the future trade relationship with the EU said that the UK wants a comprehensive free trade agreement like Canada’s. Johnson also said that the UK wants a thriving trade and economic partnership with the EU.
On the data front, the UK Manufacturing PMI came in at 50, topping the expectations of 49.8 in January.
GBPUSD hits the daily lows as PM Boris Johnson speaks about the future relationship between UK and EU. The GBPUSD pair breached below the 100-day moving average and cancelled the positive momentum that built during the last two trading sessions after the BOE decision.
On the downside, initial support for GBPUSD pair stands at 1.3045 the daily low. More bids might emerge at 1.2977 the low from January 30th. The next support area for the pair will be met at 1.2953 the low from January 14th.
On the upside, first resistance now stands at 1.3164 the 100-day moving average and then at 1.3183 the daily top. If the pair surpass that obstacle the next resistance stands at 1.3209 the high from Friday’s session. The next supply would be met at 1.3283 the high from December 31st.