The British pound came under huge pressure after U.K. Prime Minister Theresa May set a March 2017 date to trigger Article 50 and begin exiting from the European Union. The pound subsequently went into a tailspin as market participants now prepare for a “hard Brexit“.
The cable may face a next support around its post-Brexit low at 1.2798. Technically, we see an oversold situation in the 4- hour chart, which could increase the probability of some corrections toward the 1.29-level in the near-term. In case of a break below 1.2790 however, sterling could fall towards 1.2720.
From the U.K. we have the Construction PMI scheduled for release at 8:30 UTC, which could have a minor impact on the pound.
The euro traded slightly lower against the U.S. dollar Monday. With no major market moving data we expect the 1.1160/50- area to lend a short-term support to the EUR/USD while a current resistance is still intact at 1.1250.
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