GBP/USD inter-market: sees fresh selling-wave ahead of NFP

The bearish pressure behind the pound continues to mount as we head into the mid-European session, knocking-off GBP/USD back to 1.2230 levels, before quickly recovering 1 big figure last minutes.

The spot is on an extensive downward spiral so far this month, with Brexit-process related fears reinforced by UK’s PM Theresa May, after she set the Article 50 trigger timing to March-end 2017 on late-Sunday.

On Friday, the GBP/USD pair witnessed abrupt 6% flash crash in the early Asian morning, after markets reported of an erroneous ‘Fat finger’ trade. While French president Hollande’s comments of a Hard-Brexit landing, also collaborated to the massive sell-off in the pound. The major crashed from near 1.2615 level to fresh multi-decade lows of 1.1841 in matter of minutes, which came as a big shocker to the markets.

Yet another selling wave hit the major last hour, sending the rate almost 200-pips lower to 1.22 handle once again. The renewed selling pressure witnessed behind the GBP was largely seen as a preemptive move by the US desks.

Meanwhile, persistent broad based US dollar strength also keeps the downside pressure on the cable intact, as attention now turns towards the biggest risk event of this week, the US non-farm payrolls data. The US economy is expected to have added 172k new jobs in Sept versus 151k job addition last.

To conclude, fundamental factors are taking precedence over GBP’s intrinsics, and will continue to do so amid intensifying Brexit-fears ahead of the US labour market report.