GBP/USD: BOE Carney-led sell-off extends towards 1.4050

• Fading BOE May rate hike bets and soft data smashes the GBP.
• Brexit jitters back in play on Irish border spat?

The GBP/USD pair came under renewed selling pressure and refreshed two-week lows at 1.4057 in early trades, as the European traders hit their desks and reacted negatively to the dovish remarks from the Bank of England (BOE) Governor Carney.

Carney, in his overnight speech, dampened expectations of a BOE rate hike next month, as widely expected, noting that there were also “other meetings” this year. He also said that the economic data remained ‘mixed’.

The pound extends its losing streak into a fourth straight session today, also as the recent series of downbeat UK macro releases, including the wage growth, CPI and retail sales, raised doubts over the Kingdom’s economic growth outlook this year.

Further, looming Brexit concerns continue to weigh on Cable, as the European Union (EU) is said to reject the UK Brexit plan for the Irish border, people familiar with the matter reported. Meanwhile, ongoing US dollar strength, in the wake of rising Treasury yields also collaborate to the downslide in the major.

Looking ahead, the speech by the BOE MPC member Saunders will be closely heard amid a data-empty UK docket while the USD dynamics will continue to drive the spot.  

GBP/USD levels to watch

Jim Langlands at FX Charts, explains, “Cable almost reached our 1.4050 target much quicker than expected, and now looks capable of reaching the 6-month rising trend support level at 1.4010/15, with a break of 1.4000 allowing a run back to 1.3965.On the topside, sellers will arrive today at minor levels at 1.4100 and 1.4125 ahead of Fibo levels at 1.4140 and 1.4185 although this looks unlikely to be seen. If wrong, then above 1.4200 would open the way to return to 1.4220 and 1.4260 ahead of 1.4300.”