The GBPUSD pair has finally broken through the important 1.2860 support region and this makes it more vulnerable than ever. The pound had already been weak over the past couple of weeks or so and we had also pointed out to this weakness in many of our forecasts. Now with the important support region gone, it seems only a matter of time before the pair slips even further towards the 1.26 region in the short term.
GBPUSD Breaks Through Support
The traders have to take this break with a pinch of salt though, as the pair did not break through this important region with a bang but broke through with a whimper which should raise doubts on the validity of the break. Also, this latest leg down has not been backed by any specific fundamentals so far except for the fact that the pair has been under pressure over the last 24 hours due to the strength in the dollar and hence it is difficult to judge whether the break will hold.
Irrespective of what happens now, we continue to believe that the pound is likely to be under pressure in the short and medium term as the Brexit process sorts itself out. Though there has been some good progress in the Brexit process, a lot of important events, like the access to the markets of Europe, is still very unclear to the markets and this will continue to hang on top of the pound until all such issues and developments are resolved and that is why we believe that the pound will be under pressure.
Looking ahead to the rest of the day, we do not have any news from the UK or the US scheduled to be released for today and hence we can expect the GBPUSD pair to continue to trade in a weak manner.
This article was originally posted on FX Empire