GBP/USD: Recovery remains capped below 1.2850 amid Brexit anxiety

• EU-UK Brexit divorce deal, risk-on markets, weaker US dollar index keep the Cable underpinned.
• But the upside remains limited by concerns over Brexit deal clearance by the British parliament.  

The GBP/USD pair stalled its Asian rebound just below the midpoint of the 1.28 handle and eased back to the 1.2830 region, as concerns over the Brexit deal resurfaced following the comments from the UK Brexit Secretary Barclay.

UK PM Theresa May reported to plan parliament vote on Brexit deal on December 12

Barclays said that it’s a tough task to get the Brexit deal approved by the Parliament. Meanwhile, markets are already pricing-in increased odds of the UK PM Theresa May’s Brexit deal getting rejected by the Parliament amid a lack of agreement on the Irish backstop.

On Sunday, the EU 27 formally endorsed May’s Brexit deal at the EU Brexit Summit after Britain and Spain reached an agreement over the future status of Gibraltar. The spot attempted a bounce from 1.2797 region on the Brexit optimism, but the bulls maintain a cautious tone heading into the UK Cabinet meeting held later today.

“In a cabinet meeting today, she is expected to discuss the best strategy to avoid a defeat, before touring the country in the coming weeks to enlist support for her agreement among politicians and voters. Markets will also keep an eye on whether there will be a ‘no confidence’ vote in May and whether the supporting party, Ulster’s DUP, will pull its support for the government,” Aila Mihr, Analyst at Danske Bank noted.

GBP/USD Technical Levels