GBP/USD sinks further, breaches 1.2400

GBP/USD is testing the area of 2-day lows in the 1.2400 neighbourhood following a solid demand for the US dollar.

GBP/USD weaker ahead of US elections

The pair has reverted the upside to fresh tops above 1.2500 the figure seen last week following a renewed interest surrounding the buck.

In fact, the recent news that the FBI will not take any actions against Democratic candidate H.Clinton over the handling of classified information has given fresh oxygen to USD and triggered a sell off in the risk-associated space.

Recall that GBP has been boosted in past session following positive results from the UK docket but particularly after the UK High Court ruled that the Parliament must approve the triggering of Article 50 and any government plans to leave the European Union, all mitigating fears of a ‘hard Brexit’.

Furthermore, speculators’ net shorts in GBP have decreased to 6-week lows while Open Interest remained somewhat sidelined, all during the week ended on November 1 and according to the latest CFTC report.

GBP/USD levels to consider

As of writing the pair is losing 0.95% at 1.2398 facing the next support at 1.2279 (20-day sma) followed by 1.2086 (low Oct.11) and finally 1.1450 (low post-‘flash crash’ Oct.7). On the flip side, a breakout of recent high at 1.2559 (high Nov.4) would open the door to 1.2756 (55-day sma) and then 1.2968 (100-day sma).