GBP/USD drops to fresh lows near 1.3840

• Cable tests lows near the 1.3840 region on EU’s Barnier.
• The Sterling loses further ground on EU Brexit draft.
• Manufacturing PMI and speeches by Carney, May next of relevance.

The British Pound is shedding further ground on Wednesday and is dragging GBP/USD to fresh multi-day lows in the 1.3860 zone.

GBP/USD in 2-week lows

Cable gained extra downside pressure as Brexit concerns have re-emerged in the wake of the EU Draft on Brexit.

In fact, after the Brexit draft text was approved today, EU’s Chief Negotiator Michel Barnier said this morning that Brexit transition is not a given at the moment, advocating at the same time for a pick up in the pace of negotiations.

The pair reacted with an acceleration of the downside to test new 2-week lows in the 1.3850/40 band, closer to the key support at the 1.3800 neighbourhood (February 12/14 lows).

Looking ahead, UK’s manufacturing PMI will be the next risk event in the docket along with speeches by BoE’s M.Carney and PM T.May, both expected on Friday.

GBP/USD levels to consider

As of writing, the pair is losing 0.36% at 1.3845 facing the immediate support at 1.3797 (low Feb.12) followed by 1.3779 (55-day sma) and finally 1.3765 (low Feb.9). On the other hand, a breakout of 1.3970 (10-day sma) would aim for 1.4071 (high Feb.26) and then 1.4146 (high Feb.16).