GBP/USD slips below 1.26 handle to fresh two-month lows

The GBP/USD pair finally broke down of the Asian session consolidation phase and slipped below the 1.2600 handle to fresh two-month lows. 

Currently trading around 1.2590 region, the pair build on previous session's sharp slide led by BoE Governor Mark Carney's comments that suggested that a rate-hike is unlikely to come anytime soon. 

The latest leg of fall during early European session could be attributed to the UK PM May's deputy Damian Green's statement that it will take some more time to reach a deal with DUP. It is worth reporting that despite of the ongoing talks between the two parties, no deal has been reached to allow PM Theresa May to maintain a minority government. 

This coupled with uncertainty around Brexit negotiations, with the EU sticking to its demand to discuss the Brexit bill before talking trade, continues to dent sentiment surrounding the British Pound and further collaborated to the pair's slide to its lowest level since April 18.

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Investors now look forward to the Queen's Mansion House speech and BOE MPC member Haldane’s comments for some impetus ahead of the existing home sales data from the US.

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Technical levels to watch

From current levels, the pair could extend the slide towards 1.2565-60 horizontal support before eventually aiming towards testing the key 1.25 psychological mark. On the upside, 100-day SMA near 1.2630-35 region now becomes immediate strong resistance, which if conquered might trigger a short-covering bounce towards the 1.2700 handle.