GBP/USD bears in control, embarking on 5th July lows

GBP/USD has continued to suffer and has made further advances below 1.2850 to score a fresh low of 1.2817 and eyes 5th July lows below 1.28 handle at 1.2796.

To start the week off, UK Prime Minister May confirmed on the weekend earlier suggestions that she will trigger Article 50 to formally begin its divorce proceedings from the EU at the end of Q1 17.  "Several officials have already hinted this time frame, though many have been skeptical that Article 50 would be triggered at all, given the complexities of the issues," explained analysts at Brown Brothers Harriman. Adding fuel to the fire, US data brought a welcomed rebound in ISM as James Knightley, analysts at ING explained.

"The US ISM manufacturing index has risen more than expected to stand at 51.5 in September versus 49.4 in August. The consensus expectation was for a reading of 50.4. The rebound was led by a 3.2 point increase in production and a six point jump in new orders," explained Knightley, adding, "Looking to Friday's payrolls figure, the ISM employment component has offered encouragement to us regarding our above consensus 210k prediction for job creation."

GBP/USD levels

Spot is presently trading at 1.2854, and next resistance can be seen at 1.2880 (Annual Low), 1.2880 (3 Year Low), 1.2880 (5 Year Low), 1.2880 (YTD Low) and 1.2891 (Hourly 20 EMA). Next support to the downside can be found at 1.2848 (Daily Classic S3), 1.2841 (Weekly Classic S2), 1.2817 (Daily Low), 1.2767 (Weekly Classic S3). Regarding candlestick formations, we can see Dark Cloud Cover formation on the 4-hour.