GBP/USD weaker, drops to lows near 1.2220

The Sterling is trading on the defensive on Tuesday, with GBP/USD gravitating around the area of multi-week lows near 1.2220 ahead of the opening bell in Europe.

GBP/USD under pressure on Brexit

Spot remains under pressure as uncertainty over Brexit negotiations has unexpectedly increased following last week’s vote from the House of Lords, demanding guarantees for EU nationals living in the UK after the country leaves the European Union.

PM Theresa May risks another setback today, as the House of Lords will vote on the Parliament’s right in law to approve or reject her deal to leave the euro bloc. These unexpected delays could threaten May’s idea to trigger Article 50 by end of month, all rendering in extra uncertainty and further pressure on GBP.

Nothing scheduled in the UK docket today and just second-tier releases in the US should leave the attention to the UK political arena and the broad risk appetite trends.

In the meantime, global markets stay directionless ahead of the critical US Non-farm Payrolls due on Friday, which could give extra oxygen to the already high expectations of a rate hike by the Federal Reserve at next week’s meeting.

GBP/USD levels to consider

As of writing the pair is losing 0.11% at 1.2224 and a break below 1.2212 (low Mar.3) would aim for 1.2197 (low Dec.28 2016) and finally 1.2036 (low Jan.11). On the flip side, the initial up barrier aligns at 1.2308 (high Mar.2) followed by 1.2385 (55-day sma) and then 1.2410 (100-day sma).

AG Markets Review