GBP/USD on the back foot amid waning optimism over Brexit

• GBP/USD gradually declines from Friday’s high.
• The UK Parliament’s special session failed to clear the Brexit fog as Letwin Amendment took over the meaningful vote.
• Withdrawal Agreement (WA) Bill will be discussed during the week.

GBP/USD witnesses  a negative week start as the Brexit uncertainty weighs over the Cable. The pair declines to 1.2920 by the press time of early Asian morning on Monday.

With the United Kingdom’s (UK) Parliament preferring Letwin Amendment over the discussion and voting on WA bill, all efforts done by the Prime Minister (PM) Boris Johnson to get the deal went in vain. As a result, the Tory leader had to write the EU for another Brexit extension from October 31 deadline.

However, tweets from The Times’ editor suggest the European Union (EU) is less in the mood to give another longer extension except for a three month period.

Elsewhere, the Telegraph’s political correspondent Harry Yorke mentions that the Democratic Unionist Party (DUP), together with few Labour, independent and Tory backbenchers, is up for questioning the bill in the Parliament over the customs union.

Furthermore, the French government seems to hate the UK’s Brexit extension as the UK Telegraph mentions, “The French government has demanded a prompt “yes or no” from Britain over Boris Johnson’s Brexit deal as European capitals appeared split on Sunday night over an extension and its duration.  Amelie de Montchalin, Emmanuel Macron’s European affairs minister, on Sunday urged MPs to deliver a verdict so that European leaders can gather to discuss whether to grant a delay.”

On the contrary, odds favoring the US-China trade deal increased over the weekend as the South China Morning Post (SCMP) quotes Chinese Vice-Premier Liu He  saying “concrete progress” in many areas during their latest round of talks to resolve the  trade war, but negotiations must be on an equal basis.

Investors will keep an eye over the trade/Brexit headlines to determine near-term pair moves as the economic calendar is light.

Technical Analysis

April low nearing 1.2865, followed by June top close to 1.2785, seem nearby key supports for the pair, a break of which can recall a 200-day Simple Moving Average (SMA) level of 1.2715. On the upside, 1.3000 holds the top spot on the buyers’ radar.