GBP/USD bears take control below key hourly counter trendline

• GBP/USD bears step on the gas and break trendline support. 
• GBP is under pressure due to Brexit angst and economic growth concerns.

GBP/USD has been pressured in New York trade, giving back its weekend BoE headline gains made in the open of the week. At the time of writing, GBP/USD is trading at the lows of the day near 1.3584 and has fallen from high of 1.3673.

There are a number of negative fundamentals at play, from Brexit woes to the energy crisis which amounts to a weaker economic backdrop in the United Kingdom. In recent trade, headlines have circulated that David Frost, the Brexit minister, has been accused by the EU of trying to undermine serious attempts to solve the problem of the Northern Ireland protocol, the Irish foreign minister has said. 

Simon Coveney, Irish minister for foreign affairs, said he had spoken to Lord Frost’s counterpart, the European Commission vice-president, Maroš Šefčovič, on Sunday. They have agreed there would come a point when “the EU will say: enough, we cannot compromise anymore”, the Irish minister said.

There are risks of Britain implementing a move to suspend the post-Brexit Northern Ireland protocol, likely resulting in a trade war that would be damaging for both sides. This month will be key in this regard. Both sides put forward a fresh set of proposals in what might be the final disagreement before

UK factories at risk of closure due to energy crisis

Elsewhere, Britain's energy crisis is spiralling and industry leaders have been warning that this is going to halt factory production. British companies are warning that they may even be forced to close factories or have to pass on rising costs to consumers unless the UK government provides relief from soaring energy prices. Meanwhile, the British Chambers of Commerce has asked the government to implement an energy price cap to prevent smaller companies from closing down. 

The hawks circle The Old Lady 

• Bank of England says to brace for interest rate rises

Members of the MPC and the Bank of England have warned the public that inflation levels in Britain were concerning and told the nation to brace for earlier interest rate increases. BoE Governor Andrew Bailey stressed in weekend news the need to prevent inflation - running above the 2% target - from becoming permanently embedded. 

Fellow MPC member Michael Saunders told households to get ready for "significantly earlier" interest rate rises as inflation pressure mounts in the British economy, the Telegraph newspaper said on Saturday.

"I'm not in favour of using code words or stating our intentions in advance of the meeting too precisely. The decisions get taken at the proper time," Saunders said.

"I think it is appropriate that the markets have moved to price a significantly earlier path of tightening than they did previously," Saunders added.

GBP/USD technical analysis

We have seen a breakout from the trendline support that would now be expected to act as a counter trendline on subsequent retests. However, the momentum is still with the bears and a retest of the horizontal resistance could lead to the next bearish impulse to test the old structure looking left.