GBP/USD extends slide to one-month lows near 1.2250

• Pound remains under pressure, while US dollar recovers.
• GBP/USD tumbles below 1.2300 while EUR/GBP soars above 0.9100.

The GBP/USD pair dropped further after the beginning of the American session amid a recovery of the US dollar across the board. It bottomed at 1.2251, the lowest level since May 28.

The pound was already lower versus the US dollar and the decline gained speed after the rally in EUR/GBP above 0.9100. The slide of the last hour in GBP/USD was driven by a rebound of the US dollar. The Brexit saga and speculations about negative rates in the UK are affecting the pound. A new round of talks between the UK and the EU started today.

The DXY bottomed earlier at 97.11 and now it is hovering around 97.50, modestly higher for the day. The move higher gained speed as equity prices in Wall Street extend gains and following US economic data. Pending Home Sales jumped more than 40%, above expectations in May, while the Dallas Fed Manufacturing Index climbed to -6.1, against expectations of a reading of 59.

Technical levels

The negative tone in GBP/USD was reaffirmed after it broke under 1.2300. The immediate support stands at 1.2240 followed by 1.2200. A recovery above 1.2330 could alleviate the bearish pressure.