GBP/USD stays in daily lows around 1.2160

The bearish note around the British Pound remains unchanged so far this week, with GBP/USD now probing the area of session lows in the 1.2160/50 band.

GBP/USD weaker on Brexit woes, USD

Spot is retreating since Monday amidst a solid demand for the US dollar and persistent uncertainty around the future negotiations around Brexit.

The greenback has advanced beyond the 102.00 barrier when tracked by the US Dollar Index, returning to 2-month highs and extending its positive streak for the fifth session in a row, all backed by increasing bets of a Fed move at its meeting on March 15.

In fact, according to agency Reuters’s Fedwatch, the probability of a 25 rate hike next week is now just below 90%, based on Fed Funds futures prices.

Closer to home, concerns over a ‘hard Brexit’ scenario continue to weigh on the Sterling following the recent setbacks for the UK government at the House of Lords. Recall that the Upper House vote to amend the Brexit bill, demanding guarantees for EU nationals living in the UK post-exit of the European Union and the right of the Parliament to have a say on the final outcome of the negotiations to leave the bloc.

The bill is expected to be discussed at the House of Commons next week, while PM Theresa May has reiterated on Wednesday her plans to trigger Article 50 by end of month.

Nothing scheduled today in the UK’s docket, whereas the usual report on the US labour market is only due across the pond. On another front, the ECB meeting and press conference by President Draghi could bring in some volatility to the Pound via EUR/GBP.

GBP/USD levels to consider

As of writing the pair is losing 0.08% at 1.2159 facing the next support at 1.2138 (low Mar.8) followed by 1.2036 (low Jan.11) and then 1.1979 (2017 low Jan.16). On the flip side, a breakout of 1.2253 (high Mar.7) would aim for 1.2302 (high Mar.6) and finally 1.2379 (55-day sma).