GBP/USD slides farther below 1.27 handle; headed back to Friday’s 7-week lows?

Having failed to move back above 1.2770 support turned resistance, the GBP/USD pair came under some renewed selling pressure and dropped back below the 1.2700 handle.

Today's ‘hard Brexit’ rhetoric by the UK Brexit minister David Davis added to the UK political uncertainty and attracted some fresh selling pressure around the British Pound. The selling pressure further got aggravated after the US-based ratings agency - Moody's said that inconclusive UK election outcome will complicate & probably delay Brexit negotiations, and could be credit negative. 

   •  UK: May’s effort to seek a larger majority has backfired – Deutsche Bank

Meanwhile, possibilities of some stops being triggered on a sustained break back below the 1.2700 handle might have also collaborated to the pair's slide since early European session. Moreover, the prevalent risk-off environment further supported the US Dollar's safe-haven appeal against its British counterpart and eventually dragged to session low near 1.2675 region.

Moving ahead, market participants now look forward to the key central bank meetings - the Federal Reserve and the Bank of England, along with top-tier economic data, which might contribute towards making this a yet another eventual week for the major.

   •  UK: Inflation, employment and BoE to feature this week – RBC CM

Technical levels to watch

Valeria Bednarik, Chief Analyst at FXStreet writes: "In the 4 hours chart, technical indicators have resumed their declines, maintaining a strong bearish momentum around oversold territory, whilst the 20 SMA accelerated its decline far above the current level and crossing below the 200 EMA, in line with additional declines ahead."

"1.2664 is the immediate support, ahead of the mentioned 1.2634, with a break below this last exposing the 1.2590 region. The immediate resistance is 1.2700, with gains above it probably being limited by selling interest around 1.2740/60" she adds further.