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  • Renewed Brexit optimism provided some initial boost to the British Pound.
  • Barnier reportedly expressed dissatisfaction with the latest UK proposals.

The GBP/USD pair faded an intraday bullish spike to the 1.2700 neighbourhood and dropped to the lower end of its daily trading range in the last hour, albeit quickly recoverd few pips thereafter.
Following the previous session’s intraday pullback and a subsequent from the vicinity of the key 1.2500 psychological mark, the pair managed to regain some positive traction on Tuesday and was being supported by reports that negotiators turned cautiously optimistic about nearing a potential solution to the Irish backstop problem.

Brexit headlines continue to infuse volatility

The uptick got an additional boost after the UK House of Commons leader Jacob Rees-Mogg said that the votes are now there to get a Brexit deal through the lower house of the Parliament. This was followed by the EU Brexit negotiator Michel Barnier’s comments, saying that a deal with Britain could be reached this week.
The pair touched an intraday high level of 1.2697 and was rather unaffected by Tuesday’s mixed UK employment details. Meanwhile, a subdued US Dollar demand – weighed down by a sharp intraday slide in the US Treasury bond yields – remained supportive of the pair’s goodish intraday positive move.
The latest optimism, however, faded rather quickly after Barnier reportedly expressed dissatisfaction with the latest proposals coming earlier today from the UK. Barnier also said he needed a legal text agreed by the end of the day to recommend the deal at the upcoming EU Summit on Thursday and Friday.
Despite the pullback, the pair managed to find some support just ahead of the 1.2600 round-figure mark as investors now seemed reluctant to place any aggressive bets, rather prefer to wait for fresh Brexit-related news/developments before positioning for the pair’s next leg of a directional move.

Technical levels to watch