GBP/USD Price Tumbles Below 1.34 amid Brexit Woes, Fed, Eyes PMIs

• After a two-day downtrend, GBP/USD grinds lower around one week’s low.
• Frost emphasizes ongoing NI talks as a top priority, while France warns Britain about the fishing dispute.
• In light of US President Biden’s nomination of Powell as Fed chairman, DXY tracks firmer yields.

The GBP/USD price has lost around 1.3400 over the past two days during Tuesday’s opening session in Asia. Despite recent pressure on the cable pair due to the appointment of Joe Biden as Fed chairman, Brexit and COVID-19 concerns are compounding the bearish trend heading into the UK and preliminary US PMI data for November.

If there are no breakthroughs in the border talks between Northern Ireland (NI) and the European Union (EU), David Frost, British Brexit Minister, told Sky News: “We cannot continue as before.” By importing the European social model after Brexit, we will not succeed. Also, he emphasizes that the border negotiations with Northern Ireland are a top priority for him.

In another report, The Independent cited France’s warning to Britain that its old neighbors are on the rise. The French have said it is in the UK’s best interest to resolve the post-Brexit fisheries dispute, and the UK must stay true to its word for the two countries to work together.

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Moreover, US President Joe Biden’s decision to nominate Jerome Powell as chairman of the Federal Reserve System (FRS) and Richard Clarida as vice-chairman for another term boosted market sentiment the previous day. As a result, in anticipation of an accelerated contraction and rate hike in 2022, traders have pushed Treasury bond yields higher, leading to a new multi-day high for the US dollar index (DXY).

With this backdrop, the yield on the US 10-year Treasury rose faster than it had the previous week, while Wall Street benchmarks also gained modestly by the end of Monday’s North American session. On the other hand, the S&P 500 Futures Index will increase by 0.12% at the latest over the day.

UK employment, inflation, and retail sales data have raised concerns about a rate hike from the Bank of England (BOE). In this regard, today’s UK November PMI will also be critical in confirming bullish market sentiment in GBP/USD. However, Fed rate hike concerns may ease the pressure on prices. Covid issues in the Eurozone and the UK are another concern of the couple’s buyers. Coronavirus infections have surged in the UK recently, but virus-related deaths are on the decline, highlighting the need for another round of lockdowns.

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GBP/USD price technical analysis: Bears eying at YTD lows

The GBP/USD price broke below the 1.3400 mark, which indicates a probability to test the lows of 1.3330. Any upside correction will find a hurdle at the congestion of 20-period and 50-period SMAs near the 1.3430 area. Further resistance levels lie around 1.3500 round number followed by 200-period SMA at 1.3565.