GBP/USD tumbles to lows near 1.2180, Brexit weighs

Renewed Brexit fears are now weighing further on the Sterling, sending GBP/USD to test fresh multi-week lows around 1.2180.

GBP/USD weaker  on Brexit jitters

Spot dropped to levels last seen in late October in the sub-1.2200 area on Monday, as broad-based concerns over a ‘hard Brexit’ scenario seem to be taking over sentiment.

In her recent speech, PM Theresa May said the UK will look to prioritize immigration limits over keeping access to the EU’s single market, with consensus expecting May to attempt to negotiate a separate free trade agreement with the European Union.

Adding to the ongoing effervescence, SNP’s N.Sturgeon said Scotland could invoke a second independence referendum if the UK withdraws from the single market.

In the meantime, the pair is navigating fresh 3-month lows around the key support region near 1.2200 the figure. A more sustainable breach of this level could open the door for a test of the relevant area of 1.2085/80.

Collaborating with the downbeat sentiment, GBP speculative net shorts have climbed to 3-week tops during the week ended on January 3 according to the latest CFTC report.

GBP/USD levels to consider

As of writing the pair is retreating 0.74% at 1.2193 and a break below 1.2112 (low Oct.28) would expose 1.2081 (low Oct.25) and then 1.1450 (GBP ‘flash crash’ Oct.7). On the upside, the initial hurdle lines up at 1.2328 (20-day sma) followed by 1.2417 (55-day sma) and finally 1.2431 (high Jan.6).