The GBP/USD pair lost over 100-pips during the early European session on Wednesday and extended its sharp intraday pullback farther below the 1.2200 round figure mark.
The British Pound witnessed some aggressive selling on news reports that the UK government has already initiated plans to delay parliamentary proceedings for about five weeks – extending the recess period to 14 October, paralyzing any attempt by the opposition parties to preemptively block a no-deal Brexit by legislation.
Apart from the latest Brexit-related headlines, the pair was further pressurized by a modest pickup in the US Dollar demand. Despite deepening of the US yield curve inversion, the greenback remained supported by the US President Donald Trump’s softer tone against China on Tuesday and collaborated to the pair’s heavily offered tone.
Meanwhile, possibilities of some short-term trading stops being triggered on a sustained break below the 1.2200 handle further aggravated the intraday bearish pressure. Hence, a follow-through weakness, led by some fresh technical selling and amid absent relevant market-moving economic releases, now looks a distinct possibility.
Technical levels to watch
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