GBP/USD weakens below 1.2700 level despite upbeat UK PMI

   •  The global flight to safety boosts USD’s relative safe-haven status.
   •  UK manufacturing PMI beats expectations and lends some support.
   •  Brexit uncertainties might continue to cap any meaningful up-move.

The GBP/USD pair extended its sharp intraday retracement slide and has now slipped below the 1.2700 handle, shrugging off upbeat UK PMI print.

Having posted a session high level of 1.2773, the pair met with some aggressive selling pressure and was being weighed down by a goodish pickup in the US Dollar demand on the first trading day of the New Year. 

Despite a combination of negative forces - expectations of a dovish Fed in 2019 and the partial US government shutdown, the prevalent risk-off mood boosted the greenback relative safe-haven status and exerted some downward pressure on the major. 

The downward momentum stalled, rather found some support near the 1.2690 region following the upbeat release of UK manufacturing PMI, coming in at a six-month high level of 54.2 for December as compared to 53.1 in the previous month and 52.5 anticipated. 

The uptick, however, remained limited as the key focus remains on the Parliament debate on the UK PM Theresa May's Brexit agreement, set to resume in the week of January 7, and the meaningful vote planned to be held before January 21. 

Technical levels to watch