GBP/USD hits fresh daily lows, around mid-1.2600s

   •  Resurgent USD demand prompts some aggressive selling at higher levels.
   •  Bullish traders shrug off upbeat UK PMI/Hunt’s positive Brexit comments.

The GBP/USD pair extended its sharp intraday slide and is currently placed at the lower end of its daily trading range, just above mid-1.2600s.

After an initial uptick to 1.2775 area, the pair witnessed a sudden turnaround in sentiment on the first trading day of the New Year and has now lost over 110-pips from session tops amid a goodish pickup in the US Dollar demand. 

Despite expectations of a dovish Fed in 2019 and the partial US government shutdown, the greenback regained positive traction and was seen as one of the key factors behind the pair's follow-through retracement from 3-1/2 week tops, levels beyond the 1.2800 handle, set on Monday.

Bearish traders even shrugged off today's upbeat UK manufacturing PMI, coming in at a six-month high level of 54.2 in December, with the USD price dynamics turning out to be an exclusive driver of the pair's momentum through the mid-European trading session.

Even some positive comments by the UK foreign secretary Jeremy Hunt, saying that the UK PM Theresa May will find a way to get Brexit deal through Parliament, did little to ease the bearish pressure or stall the ongoing slide.

Hence, a follow-through weakness, ahead of the Parliament debate on the May's Brexit agreement, set to resume in the week of January 7, and the meaningful vote planned to be held before January 21, now looks a distinct possibility.

Technical levels to watch