GBP/USD extends slide after EU summit to fresh weekly lows

• Pound losses strength after EU summit and prints new daily lows across the board.
• Cable hits lowest since October 9, near 1.3050.

The GBP/USD pair dropped further during the last hours and extend losses. It reached 1.3057 and rebounded modestly. It was hovering under 1.3070, still under pressure.

The move to the downside took place amid a stronger and US dollar and particularly on renewed weakness around the pound following the end of the European Union summit in Brussels. UK PM Theresa May explained that a longer transition period could help solve the Irish border issue. European Union officials consider that a longer transition will probably take place.

The uncertain around Brexit continues to weigh on the pound. Earlier today, weaker-than-expected UK retail sales data limited the pound. Regarding the USD, data released today showed that the labor market and activity remains strong.

The greenback is also receiving support form risk aversion and yesterday’s FOMC minutes. Equity prices in the US were falling sharply. The Dow Jones was down 1.90% and US yields turned to the downside amid an increase in the demand for safe-haven assets.

GBP/USD Levels to watch

To the downside, below daily lows support levels might be located at 1.3030 (Oct 9 low), 1.3000 and 1.2960. On the upside, the immediate residence is now seen at 1.3075 (European session low), followed by 1.3115 and 1.3130 (Oct 18 high).