GBP/USD remains depressed near weekly lows, around 1.2420-30 area ahead of US GDP

• Persistent fears of a no-deal Brexit continue to weigh on the British Pound.
• The ongoing USD bullish run to two-month tops added to the selling bias.
• The downside seemed limited ahead of the advance US Q2 GDP print.

The GBP/USD pair continued losing ground through the mid-European session on Friday and has now dropped to the lower end of its weekly trading range, just above the 1.2420 region.

After once again failing to find acceptance above the key 1.2500 psychological mark on Thursday, the pair witnessed some fresh selling and was now seen trading with a negative bias for the fifth session in the previous five. The British Pound remained depressed amid growing fears that the UK will crash out of the EU on October 31, especially after the new British PM Boris Johnson's first statement in the House of Commons.

Johnson on Thursday said that backstop must be abolished in order to reach a deal and added that we will have to leave without a deal if the EU is not ready to make changes to the withdrawal agreement. This was followed by the European Union's Brexit negotiator Michel Barnier's remarks that Johnson's demand to eliminate the backstop was unacceptable, which did little to ease fears of a no-deal Brexit.

On the other hand, the US Dollar climbed to two-month tops amid diminishing odds of a 50 bps rate cut by the Fed at its upcoming meeting on July 30-31 and renewed optimism over a possible resolution of the prolonged US-China trade disputes. It is worth reporting that top US negotiators have been confirmed to meet their Chinese counterparts and resume in-person trade talks on July 30-August 1.

Meanwhile, the intraday downtick remained limited, at least for the time being, as investors preferred to wait for Friday's important release of the advance US GDP report, anticipated to show that the US economic growth decelerated sharply to 1.8% annualized pace during the second quarter of 2019 as against a robust 3.2% expansion recorded in the previous quarter.

Technical levels to watch