GBP/USD extends Friday's pullback from multi-year tops, slides below 1.3400 mark
- GBP/USD witnessed some follow-through selling for the second consecutive session on Monday.
- Not so optimistic Brexit-related headlines took its toll on the sterling and exerted some pressure.
- Softer risk tone benefitted the safe-haven USD and contributed to the pair’s intraday selling bias.
The intraday selling around the British pound picked up pace in the last hour and dragged the GBP/USD pair further below the 1.3400 round-figure mark. The pair was last seen trading near two-day lows, around the 1.3380 region, down around 0.45% for the day.
The pair extended Friday's sharp retracement slide from the 1.3540 region – the highest level since April 2018 – and witnessed some follow-through selling for the second consecutive session on Monday. The incoming headlines dampened prospects for an imminent Brexit deal, which took its toll on the sterling and turned out to be a key factor that exerted some pressure on the GBP/USD pair.
According to Reuters, the EU's Brexit negotiator Michel Barnier told national EU envoys that there is no Brexit deal yet and the three key outstanding issues remain open. Reuters also cited a senior EU diplomat saying that Barnier's briefing was rather downbeat on prospects of a deal. Separately, RTE's Europe Editor, Tony Connelly reported that Barnier has played down any progress on fisheries.
This comes amid a slight deterioration in the global risk sentiment, which drove some haven flows towards the US dollar and further contributed to the GBP/USD pair's downfall. News that the United States was preparing sanctions on at least a dozen Chinese officials amid their alleged role in disqualification of elected opposition legislators in Hong Kong weighed on investors' sentiment.
However, expectations that the US lawmakers will agree on a new coronavirus relief package should keep a lid on any meaningful upside for the greenback. This, in turn, should extend some support to the GBP/USD pair. That said, the key focus will remain on developments surrounding the Brexit saga, which should continue to act as an exclusive driver of the sentiment surrounding the British pound.
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