• The latest UK political developments prompt some aggressive selling.
• Dismal UK monthly retail sales data did little to ease the bearish pressure.
The GBP/USD pair remained heavily offered through the mid-European session and plunged to two-week lows in the last hour, albeit now seems to have found decent support near mid-1.2700s.
The pair faced rejection near 100-day SMA and came under some intense selling pressure, collapsing around 280-pips from an intraday high level of 1.3030 in a knee-jerk reaction to the UK Brexit minister Dominic Raab's resignation.
This was followed by resignations from Junior Brexit Minister Braverman Resigns and another UK Cabinet Minister Esther McVey in protest of the UK PM Theresa May’s Brexit deal, which fueled speculation for a no-confidence vote against the UK PM Theresa May.
Adding to this, the UK monthly retail sales unexpectedly contracted by 0.5% during the month of October and further aggravated the selling pressure surrounding the British Pound, taking along some short-term trading stops placed near weekly lows, around the 1.2830-25 region.
The bearish pressure seemed receding following the UK PM Theresa May’s comments during her parliamentary address, saying that the said agreement was just a draft treaty that can be negotiated.
The pair quickly rebounded around 50-60 pips from daily lows and now seems to have stabilized around the 1.2800 handle as investors now look forward to fresh Brexit-related developments before positioning for the next leg of the intraday move.
Technical levels to watch
Any subsequent recovery move might now confront fresh supply near the 1.2825-30 region, above which a fresh bout of short-covering could lift the pair back towards 1.2875-80 horizontal resistance en-route the 1.2900 round figure mark.
On the flip side, the 1.2750 region now becomes an immediate support to defend, which if broken might turn the pair vulnerable to accelerate the fall further towards the 1.2700 handle en-route YTD lows, around the 1.2660 region.
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