GBP/USD headed to March lows at 1.3712, UK politics weigh

• Sold-off into rising concerns over Brexit and USD strength.  
• Will it break below the 1.3700 support on upbeat US Core PCE?

The GBP/USD pair keeps falling in the European session, as the bears look to the test the March lows at 1.3712 ahead of the US macro releases.

The bearish pressure on the pound intensified on rising concerns over the Irish border issue amid a setback to the UK PM May’s government after the UK Home Secretary Rudd resigned over the immigration scandal, opening doors for the Brexit hardliners.

Further, the risks remain to the downside with the Brexit jitters playing while poor UK Q1 GDP numbers almost killed the chances of a June BOE rate hike.

On the USD-side of the story, a fresh bid-wave caught by the Treasury yields sent the US dollar back towards the 92 handle against its main competitors, which also can be attributed to one of the reasons behind the pair’s latest declines.  

Focus now remains on the US Core PCE price index and personal spending data for the next push lower in the major.

GBP/USD levels to watch

Karen Jones, Analyst at Commerzbank notes: “GBP/USD sold off sharply after poor GDP Q1 growth numbers came out on Friday. It is approaching the 1.3712 March low and the 1.3694/58 September peak and 2016-2018 uptrend. Intraday rallies are indicated to terminate circa 1.3900/70 and we have 13 counts on the intraday charts. We would allow for some near-term profit taking and as a precaution will cover the short positions for now. Rallies are likely to remain capped by the 55-day ma at 1.4008”.