GBP/USD: bears in control with opening bearish Brexit fuelled gap below 1.4500

Markets are fine tuning their positions as we move ever closer towards the EU referendum and Sterling has been dumped in early Asian trade to start the week.

Having recovered by the close of last week's business on a broad based sell-off in the U.S. dollar reaching a high of 1.4580 to settle at 1.4517 by the close, GBP/USD lost the 1.45 handle in today's open making a session low so far of 1.4455 as traders soak up the reality that a Brexit could very well be on the cards with polls start leaning in favour of leave camp.

"The leave campaign has picked up momentum and taken a three-point lead over remain in the latest Observer/Opinium poll on the EU referendum. The Brexiters now stand on 43%, while 40% say they support the campaign to keep the UK in the union," as reported in this weekend's Guardian. 

U.S. nonfarm payrolls shocker reviewed - Westpac

While Brexit is heating up, we will also have the markets adjusting to the nonfarm payrolls shocker this week and Yellen will be a key highlight tonight. "It is an opportunity for her to provide a final word on policy ahead of the June meeting blackout period," explained analysts at Westpac who also offered a full review of the nonfarm payrolls event here.

GBP/USD levels

While the outlook is both technically and fundamentally bearish with price dropping back away from the 200 dma at 1.4739 and recoveries struggling at the 20 dma at 1.4515, the bears still have some work to do to break and close below the 50 dma at 1.4419. The 100 dma is located at 1.4345 ahead of a previously strong resistance line at circa 1.4250/70.

Analysts at Commerzbank recently explained that only on a close below the 1.4254 2 month uptrend would the chart picture deteriorate. Below the 2 month support line lies 1.4083/05 area where the January and April lows were made. "Nearby resistance lies at 1.4515 (March high) ahead of 1.4665 (February high), intraday rallies are indicated to halt ahead of the first level."