GBP/USD gravitating towards 1.2600 handle ahead of May’s statement in parliament
• UK PM May pulls Tuesday’s meaningful Brexit vote and prompts some aggressive selling.
• A goodish pickup in the USD demand further collaborates towards accelerating the fall.
The selling pressure around the British Pound remains unabated, with the GBP/USD pair accelerating the downfall towards the 1.2600 handle, the lowest since June 2017.
The pair came under some intense selling pressure since the early European session on Monday and tumbled nearly 150-pips from an intraday high level of 1.2760 in reaction to news that Tuesday's meaningful Brexit vote in the UK parliament has been delayed by the PM Theresa May.
In the latest development, PM May is going back to Brussels to look for a better deal and insist on necessary changed to secure legally-binding assurance that the UK won't be trapped in the backstop indefinitely. Meanwhile, the EU has already clarified that the deal already on the table is the best, and only deal possible, and we will not renegotiate on the agreement.
The uncertainty continued weighing heavily on the British Pound, which coupled with a goodish pickup in the US Dollar demand, supported by a modest uptick in the US Treasury bond yields, further collaborated towards aggravating the selling pressure.
PM May will now provide an update on Brexit to the House of Commons on Monday afternoon at 3:30 p.m. and her comments will play an important role in influencing the sentiment surrounding the British Pound through the US trading session.
Technical levels to watch
The 1.2600-1.2590 region seems to act as an immediate support, which if broken is likely to accelerate the fall further towards challenging the key 1.2500 psychological mark. On the flip side, any attempted recovery now seems to confront some fresh supply near the 1.2660-65 region, above which a bout of short-covering could lift the pair further towards reclaiming the 1.2700 handle.