Search ForexCrunch

   “¢   Brexit uncertainties continue to dent sentiment around GBP.
   “¢   A modest USD rebound adds to the downward momentum.

The GBP/USD pair extended its sharp intraday fall and tumbled to the 1.2700 neighborhood or one-month lows in the last hour.

The pair did gain some positive traction and touched a session high level of 1.2825, albeit failed to capitalize on the move despite stronger than expected UK manufacturing PMI print.  

The uptick turned out to be short-lived, rather met with some aggressive supply at higher levels amid concerns that the UK PM Theresa May could face a no-confidence vote if parliament rejects the Brexit deal.

The GBP bulls seemed unimpressed by the UK PM  May’s comments, saying that she will still have a job in two weeks time and ruling out the possibility of a second Brexit referendum.  

As Mario Blascak, FXStreet’s own European Chief Analyst notes: “All eyes are now on the UK parliament voting on Brexit deal on December 11 with the parliamentary debate starting on December 5.”

Meanwhile, investors looked past the latest optimism over the US-China trade truce, with a goodish US Dollar rebound further collaborating to the pair’s sharp intraday fall of over 100-pips.  

The pair now seems to have found some support ahead of the 1.2700 handle as market participants now look forward to the release of US ISM manufacturing PMI for some fresh impetus.  

Technical Outlook

Blascak further writes: “After sliding lower earlier on Monday, the technical oscillators including Momentum and the Relative Strength Index are both pointing sideways in the neutral territory. The Slow Stochastics fell from the overbought territory after making a bearish crossover earlier. The GBP/USD is expected to stay near 1.2735 level with price movement tilted to the downside re-testing the round big figure of 1.2700 before targeting 2018 low of 1.2662.”