GBP/USD plummets to session lows, slides further below mid-1.2900s
- The incoming Brexit-related headlines prompted some fresh selling around the GBP/USD.
- The Time reported the EU will threaten legal action against Britain over breaches of the treaty.
- The prevalent USD selling bias failed to impress bullish trades or lend any support to the pair.
The GBP/USD pair quickly retreated around 100 pips in the last hour and dived to fresh session lows, around the 1.2935-30 region.
The pair struggled to capitalize on its intraday uptick, instead met with some fresh supply near the 1.3035 region and was being pressured by the incoming Brexit-related headlines. The latest leg of a sudden fall was triggered by a report by The Times, suggesting that the European Union will threaten legal action against Britain over breaches of the Brexit withdrawal treaty.
It is worth recalling that the UK government on Wednesday its blueprint for life outside the European Union. The UK's so-called internal market bill acknowledged that some powers conferred by the legislation might be inconsistent with international law. The UK government announced this Thursday that bill will be debated next week, on September 14.
In the meantime, investors will keep a close eye on headlines coming out of a meeting between the European Commission Vice President of inter-institutional relations, Maroš Šefčovič and the UK Cabinet Office minister, Michael Gove. Fresh developments surrounding the Brexit saga will continue to play a key role in influencing the sentiment surrounding the sterling.
With the GBP price dynamics turning out to be an exclusive driver on Thursday, the prevalent US dollar selling bias failed to impress bullish traders or extend any support to the GBP/USD pair. The greenback remained depressed in the wake of a goodish pickup in demand for the shared currency, which seemed rather unaffected after the ECB announced its monetary policy decision.
Technical levels to watch