GBP/USD In Free-Fall Mode, DXY Strength + Brexit Weight

The Sterling sell-off move, from a daily perspective, looks rather overextended after 4 consecutive days of losses and 6 out of 7. We should go back to late October ’18 to find a GBP so unfavored. Nonetheless, with the crack of 1.30 now a reality, the 5-DMA slope keeping the rhythm bearish, the slope in both the DXY (green line) and US-UK bond yield spread (blue line), and the POC trapped above 1.30, there is enough evidence to think that this bearish run may have further to go should Brexit headlines play in favor. On the hourly chart, the 100% projection target from the 1.3155–1.3005 measurement has been reached, and as it is often the case when price breaks through, it’s now acting as intraday resistance. Note, there is a high risk that this market exhibits some type of bounce before a potential bearish resumption as the magnitude of the move is very elongated. Any retracement is likely to face the maximum amount of sell-side pressure via offer clusters at 1.30, 1.3025 ahead of 1.3050–55.