GBP/USD drops to fresh weekly lows, inching closer to 1.3200 mark
- GBP/USD witnessed some follow-through selling for the third consecutive session on Friday.
- Concerns about a no-deal Brexit, dovish comments by BoE’s Saunders weighed on the pound.
- The USD benefitted from a sharp fall in the US unemployment rate, surging US bond yields.
A sudden pickup in the USD demand pushed the GBP/USD pair to fresh weekly lows, around the 1.3215-10 region during the early North American session.
The US dollar weakened a bit in reaction to softer headline NFP print, which showed that the US economy added 1.371 million jobs in August as compared to 1.4 million anticipated. Meanwhile, the unemployment rate surpassed even the most optimistic estimates and fell to 8.4% from 10.2% previous.
This coupled with a strong rally in the US Treasury bond yields attracted some dip-buying around the greenback. This, in turn, exerted some additional pressure on the GBP/USD pair, which extended this week's retracement slide from YTD tops and remained depressed for the third consecutive session.
The British pound was further pressured by renewed concerns about a no-deal Brexit. Adding to this, the BoE MPC member Michael Saunders indicated that the UK central bank could add to its unprecedented emergency support measures, which took its toll on the sterling and contributed to the downfall.
Apart from this, the latest leg of a slide over the past hour or so could further be attributed to some technical selling below mid-1.3200s. A subsequent breakthrough the 1.3200 mark will now be seen as a fresh trigger for bearish traders and set the stage for an extension of the corrective slide.
Technical levels to watch