GBP/USD sinks to pre-hawkish BoE levels, below mid-1.3100s

The selling pressure around the British Pound remains unabated, with the GBP/USD pair sinking to fresh three-week lows in the region below mid-1.3100s.

The pair has now retreated back to pre-hawkish BoE levels and was being weighed down by the latest political development in the UK, wherein Theresa May could be ousted as Prime Minister as early as Christmas.

   •  UK: PM May stole some thunder from the opposition - BBH

As reported by the Telegraph, as many as 30 Tory MPs are said to be preparing a letter calling for May's resignation, which was eventually seen weighing heavily on the British Pound across the board.

The selling pressure aggravated after the latest US economic releases - weekly jobless claims and trade balance data, better expectations. Adding to this, Philadelphia Fed President Patrick Harker's hawkish comments provided an additional boost to the US Dollar and forced the pair to test 50-day SMA support near the 1.3135 region.

   •  Fed’s Harker: Penciled in 3rd hike in December - CNBC

Next on tap would be the release of factory orders data, which along with Fedspeaks would now be looked upon for any immediate respite for the bulls. 

Technical outlook

Valeria Bednarik, Chief Analyst at FXStreet writes: "Large stops are suspected below the mentioned 1.3146 low, and a break below it could see the bearish momentum accelerate, with 1.3100 being the next probable bearish target."