GBP/USD hits fresh session lows, around mid-1.3000s

   “¢   A goodish pickup in the USD demand triggers the initial leg of the retracement slide.
   “¢   Conservative MP Steve Baker’s comments exert additional downward pressure.
   “¢   Investors eye Brexit Secretary Raab’s speech in the parliament for fresh impetus.

The GBP/USD pair struggled to build on its early positive momentum to 100-day SMA hurdle and has now drifted into negative territory for the second straight session.

After an initial uptick to levels just above the 1.3100 handle, the pair met with some fresh supply and was being weighed down by some renewed US Dollar buying interest.  

Firming prospects for gradual Fed rate hike through the end of this year, and beyond, pushed the US Treasury bond yields to fresh multi-year tops and continued underpinning the greenback.

Meanwhile, the latest leg of a sharp decline of around 50-pips over the past couple of hours or so could further be attributed to comments by Conservative MP Steve Baker, a former junior Brexit minister.  

Speaking on BBC Radio 4 this Tuesday, Baker said that his Conservative colleagues are prepared to vote against Chequers amendments and the UK should not be afraid to move forward with ‘no-deal’.  

With Brexit headlines turning out to one one of the key factors influencing sentiment surrounding the British Pound, market participants now look forward to the Brexit Secretary Dominic Raab’s speech in the parliament.  

According to the POLITICO, Raab will update MPs on the Brexit negotiations today as parliament returns from its 25-day conference break and his comments should infuse a fresh bout of volatility across the GBP pairs.

Technical levels to watch

The 1.3030-25 region might continue to act as an immediate support, which if broken is likely to accelerate the fall towards the key 1.30 psychological mark before the pair eventually drops to mid-1.2900s.

On the upside, the 1.3100 handle now seems to have emerged as an immediate hurdle, above which the pair is likely to head towards testing 1.3125 intermediate resistance en-route the 1.3155-60 supply zone.