GBP/USD failed to break above 1.3500 on Friday. The pair has started the new week on the back foot and it is set to struggle to rebound as Brexit tensions escalate, FXStreet’s Eren Sengezer reports.

Reescalating Brexit tensions seem to be forcing investors to adopt a cautious stance

“Commenting on reports claiming that the UK could trigger Article 16, Ireland’s Foreign Minister Simon Coveney told RTE News on Sunday that Britain was ‘deliberately forcing a breakdown’ over Brexit's Northern Ireland Protocol. Coveney further added that the EU could suspend the entire Brexit deal in case the UK was to trigger Article 16.”

“Unless the pair manages to make a daily close above 1.3500, recovery attempts are likely to remain limited in the near term with fundamental drivers remaining bearish.” 

“Supports are located at 1.3400 (psychological level, static support, 2021 low) aligns as the first target before 1.3360 (static level) and 1.3300 (psychological level).”

See: GBP/USD continues to make its way lower towards the 1.3166 mark – DBS Bank