GBP/USD loses 300 pips amidst the rising concerns of a hard Brexit

Following
the Conservative Party’s victory in the UK’s general election on December 12^th,
GBP/USD was reported to have printed
a 19-month high above 1.3500 level. The past week, however, wasn’t kind to
the currency. Cable lost a total of over 300 pips last week and erased all of
the gain that it had recorded following the general election. According to the
technical experts, 1.3000 has come out as a support for Cable. The pair rebounded
from this support last week but remained capped at 1.3050 on the upside.

PM
Johnson’s Statement Weighed On The Forex Market

According
to the Forex analysts, the majority of the investors closed their long
positions following the sudden rise in GBP/USD around the days of general
election. To add to it, Prime Minister Boris Johnson’s statement that the UK’s
government doesn’t plan on extending the transition period for the European
Union that ends in December 2020, increased the risk of a hard Brexit that, as
per the experts, may have contributed heavily in weighing the currency pair
down in the forex market.

Johnson’s
Brexit deal has also received Parliament’s approval on Friday. It is now in the
final stage of awaiting approval from the House of Commons. Analysts have
expressed confidence that the results will remain the same in the House of
Common with the bill easily getting the approval with the majority vote.  

Parliament’s
vote was already factored in the GBP/USD price, as evident by the lack of
movement in the forex market. The Bank of England also announced on Friday that
the current governor, Mark Carney, will be replaced by Andrew Bailey in the
upcoming March.

U.S
– China Trade Talks To Be A Market Mover In The Upcoming Week

In
the next week, experts are anticipating the news from the U.S – China trade
negotiations to be in focus. Trump’s impeachment and the durable goods order
report that is to be revealed on Monday, as per the analysts, can be expected
to cast a significant movement in the forex market. Other than that, news
regarding the UK’s
trade relations with different countries can be expected to make a headline
and make its mark as the market mover in the next week.

According
to the technical analysis specialists, 1.3000 marks a strong support for the
pair in the near term. Breaking below the crucial resistance will open door for
Cable to further decline to 1.2945 level. The strong resistance, on the other
hand, is located at 1.3100 level. A daily close above the resistance will
establish a firm upward trend in Cable.