GBP/USD rebounds from daily lows, back above 1.2700 handle

• The incoming negative Brexit headlines weighed heavily on the British Pound.
• The UK government was reportedly downbeat on chances of a Brexit deal.

The GBP/USD pair remained under some selling pressure amid a flurry of Brexit headlines, albeit managed to recover around 60-65 pips from daily lows touched in the last hour.
 
The pair failed to capitalize on the previous session’s strong upsurge to the highest level since May 21 and met with some aggressive supply on Wednesday amid fading optimism over a possible Brexit agreement before the fast-approaching October 31 deadline.

Brexit headlines continue to infuse volatility

Against the backdrop of the Democratic Unionist Party’s (DUP) concerns on the UK PM Boris Johnson’s Brexit concessions, comments by a UK official, saying that the government was downbeat on chances of a Brexit deal, exerted some heavy pressure on the British Pound.
 
The intraday selling pressure aggravated further, dragging the pair closer to mid-1.2600s, in reaction to reports that suggested technical Brexit negotiations have reached an impasse. The report further added that the EU sees Brexit deal as impossible unless the UK moves.
 
With the latest Brexit developments turning out to be an exclusive driver of the intraday volatility, the pair seemed rather unaffected by a subdued US Dollar price action, which remained on the defensive amid the ongoing slide in the US Treasury bond yields.
 
It will now be interesting to see if the pair continues to show some resilience below the 1.2700 round-figure mark or the current pullback marks the end of the recent strong bullish momentum that started last week and the resumption of the recent bearish trend.

Technical levels to watch