GBP/USD: Brexit fears push it to fresh 7-year low

Discussion in 'Fundamental Analysis' started by FXStreet_Team, Feb 22, 2016.

  1. FXStreet_Team

    FXStreet_Team Well-Known Member Trader

    Oct 7, 2015
    Likes Received:
    US desks joined the “Sterling sell-off” party, sending the GBP/USD to a fresh 7-year low of 1.4057 levels.

    Hovers around Jan 21 low

    As of writing, the pair traded around the Jan 21 low of 1.4079. The drop seen today is largely due to increased fears of Brexit as the influential London Mayor is now in support of leaving the EU. Even the ratings agency Moody’s was on the wires today, warning a potential downgrade if UK exits EU.

    It remains to be seen if the Brexit trade continues to push GBP lower or the divergence between GBP and FTSE narrows ahead of London closing.

    GBP/USD Technical Levels

    The immediate resistance is seen at 1.4125 (Jan 20 low), above which the spot could re-test major hurdle at 1.4149 (Jan 29 high). On the other hand, a breakdown of 1.4057 (daily low) could see the spot extend losses to 1.40 handle.
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