GBP/USD struggles to make it through 1.2600 handle

   “¢   Some renewed USD selling helped stage a solid rebound from 21-month lows.
   “¢   The USD bulls seemed little impressed by stronger than expected ADP report.
   “¢   Brexit uncertainties might continue to keep a lid on any meaningful up-move.

The GBP/USD pair has managed to recover around 200-pips from Asian session flash crash to 21-month lows, albeit struggled to extend the momentum further beyond the 1.2600 handle.  

The US Dollar failed to capitalize on early up-move, supported by the global flight to safety, and dropped back to the 96.00 handle, which was seen as one of the key factors behind the pair’s goodish intraday rebound from sub-1.2400 level.

Even today’s stronger than expected ADP report, showing that the US private sector employers added 271K new jobs in December, the most in two years, failed to provide any meaningful boost to the greenback and prompt any fresh selling.

Meanwhile, investors paid little attention to the latest Brexit headlines, wherein the European Commission reiterated that the Brexit deal on the table is the best and only deal possible and will not be re-negotiated.

Moving ahead, the broader market risk sentiment/the USD price dynamics might continue to play an important role in influencing the pair’s momentum ahead of Friday’s UK services PMI and the closely watched US monthly jobs report (NFP).

The key focus, however, will remain on the upcoming UK Parliament debate on PM May’s Brexit agreement, set to resume next week, and the meaningful vote planned to be held before January 21.  

Technical Outlook

Mario Blascak, FXStreet’s own European Chief Analyst writes: “The technical oscillators turned lower with Sterling slumping to a fresh 21-month low and the Slow Stochastics made a bearish crossover within neutral territory.”

“With Brexit uncertainty weighing on Sterling, a fundamental pressure is still in place to see GBP/USD falling further towards 1.2500-1.2440 level,” he added further.