GBP/USD hits fresh daily lows near 1.2700

• US dollar recovers momentums as US yields rise and equity prices retreat.  
• Pound’s negative tone is incrementing ahead of Brexit deal debate at Parliament.  

Cable weakened during the American session and fell to 1.2709, hitting a fresh daily low. Then bounced modestly to the upside to 1.2730. The move to the downside took place on the back of a recovery of the US dollar across the board.  

The DXY rose from 2-month lows and now is attempting to rise back above 96.00. The improvement in risk appetite weakened the US dollar early on Tuesday. Optimism about the China-US trade talks supported the positive sentiment. US president Trump tweeted today that “talks are going very well.” Today at 9 PM ET he will deliver a speech from the White House on the Southern border.  

The pound also hit a fresh low versus the euro at the time GBP/USD bottomed. Uncertainties about the Brexit deal vote at the Parliament next week and its potential consequences are a negative influence for the pound at the moment.  

Technical levels to watch

Earlier today, GBP/USD approached 1.2800, but it was rejected like a week ago. Now cable is in negative territory for the day, trading at 1.2720, about to post the first slide after rising during three days in-a-row.  

To the downside, support levels might be seen at 1.2700/10, 1.2675 and 1.2650. On the upside, 1.2750 is the immediate resistance followed by 1.2785 and then comes the 1.2800 zone. A consolidation on top of the 1.2800 area would clear the way to more gains.