GBP/USD can't catch a bid to close the May Brexit news gap

GBP/USD is unable to recover the opening gap in Asia today as we open the week on the back-foot due to weekend news that UK PM, May, has brought the deadline for the Brexit as soon as the end of March 2017.

GBP/USD dropped back from 1.3023 highs last week and sold off through and below the 1.30 handle in the close of the US session on Friday and has opened even lower today at 1.2920, struggling to move back to close the gap as all liquidity is adding shorts to an already extremely short position in the markets for sterling. 

In an interview on the BBC over the weekend and subsequently addressing the Conservative Party Conference, May explained that the UK will be "a fully independent, sovereign country." However, there is still much that needs to go to debate and negotiation while the two year expiry time of the Lisbon Treaty-based trigger means the UK will not have left until the summer of 2019 and thus plenty of uncertainty left that could all lead to a hard Brexit landing should negotiations not go favourably and adversely affect the UK economy. 

GBP/USD levels

GBP/USD has been below the 1.30 handle for the best part of September, but has not come as close to the 1.29 handle since 23rd September after the 1.31 sell-off. We are at a previous double bottom and should the price not be able to recover, the downside is open up to 1.2865 and August lows ahead of 1.2796 and post Brexit vote July lows. To the upside, 1.35 is the key psychological target and only above there would alleviate the continued downside bias.