GBP/USD gives up gains as Brexit optimism fades

• GBP/USD fails to maintain Thursday’s gains and approaches two-year low.
• Brexit vote turns three next week and there is no deal in sight.

The GBP/USD pair has pulled back from the 1.2560 area where it seems to have found some resistance, resuming its downward path after enjoying some relief over the previous two days.

GBP/USD dragged down by Brexit uncertainty

The British Pound rallied on Thursday after the UK Parliament voted in favor of an amendment that prevents the Prime Minister to suspend the Parliament and allow the United Kingdom (UK) to leave the European Union (EU) without a deal. However, overall uncertainty remains high on the Brexit matter, with the EU and the UK unable to agree on the terms of the exit.  

Next week, on June 23rd, it will be three years since the Brexit referendum took place and most UK citizens voted to leave the EU. The process of the UK withdrawing from the EU was due to conclude on March 29th, 2019, but the deadline was extended to October 31st, 2019, in the absence of a deal. 

Over this time, the Pound has come a long way down, although alternating upward and downward cycles, having lost more than 16% against the Dollar to this day. 

GBP/USD technical levels

At time of writing, GBP/USD is trading at the 1.2480 area, down 0.54% on the day and recording a 0.73% weekly loss. Next support levels are seen at 1.2381 (two-year low, Jul 17), 1.2365 (Apr 2017 monthly low) and not much until 1.2300 (next psychological level). On the other hand, resistances on bounces could be faced at the 1.2557-67 area (Jul 18 high/20-day SMA), 1.2648 (Jul 2 high) and then 1.2705 (monthly high Jul 1).