“¢ Raab’s comments offset overnight Brexit optimism and prompt some fresh selling.
“¢ Gibraltar remains one of the key sticking points ahead of Sunday’s EU summit.
The GBP/USD pair remained under some selling pressure through the mid-European session and dropped to the 1.2800 handle in the last hour, albeit quickly recovered few pips thereafter.
After oscillating in a narrow trading band through the Asian session on Friday, the pair met with some aggressive selling pressure after the former UK Brexit Secretary Raab said that the British parliament will vote down the UK PM Theresa May’s Brexit deal.
Meanwhile, Gibraltar remained one of the key sticking points ahead of the crucial summit on Sunday. Expectations that Spain might veto the draft Brexit deal further dented sentiment surrounding the British Pound and collaborated to the pair’s intraday slide.
The bearish pressure, however, receded near the 1.2800 handle, with the pair quickly recovering around 20-30 pips in reaction to the EU Brexit negotiator Michel Barnier’s comments, citing that they are working hard on Gibraltar compromise.
It would now be interesting to see how traders prefer to position themselves ahead of the key event risks over the weekend – the European Commission president Jean-Claude Juncker-UK PM Theresa May’s at 1700 GMT on Saturday in Brussels and the key EU Brexit summit on Sunday.
Technical levels to watch
A follow-through weakness below the 1.2800 handle is likely to find support near the 1.2775-65 region, which if broken might turn the pair vulnerable to accelerate the fall back towards the 1.2700 handle. On the flip side, any attempted recovery beyond mid-1.2800s now seems to confront fresh supply near the 1.2875-80 region, above which the pair is likely to aim towards surpassing the 1.2900 handle.
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