GBP/USD quickly reverses a dip to sub-1.2900 levels, focus remains on Brexit
- The incoming Brexit-related headlines continue to influence the price action.
- Johnson confirms to push for election if MPs reject his fast-tracked timetable.
The GBP/USD pair momentarily slipped below the 1.2900 handle during the early North-American session, albeit quickly recovered few pips thereafter.
The pair witnessed a modest pullback on Tuesday as investors seemed inclined to lighten their bullish bets ahead of the key Brexit deal votes. The first vote on the UK Prime Minister Boris Johnson’s Brexit deal is scheduled at 18:00 GMT and if passed, will be followed by a discussion on the timetable for the Withdrawal Agreement bill.
Brexit headlines remain an exclusive driver
The sentiment deteriorated further after Johnson's spokesman said that there’s no guarantee of the European Union (EU) granting an extension. This now makes it even more important for the UK government to win Tuesday's vote in order to proceed to the next stage of legislation and get the Brexit done by October 31.
Meanwhile, the latest leg of a slide over the past hour or so could further be attributed to reports, indicating that if the UK lawmakers vote down the legislative timetable then the government will push for an election before Christmas. The news, confirmed by Boris Johnson, added a bit of uncertainty and exerted some additional downward pressure on the British Pound.
However, the fact that chances for the approval of the Withdrawal Act Bill (WAB) have been improving, the downtick lacked any strong follow-through selling and remained limited, rather attracted some dip-buying interest and helped the pair to quickly rebound around 30-35 pips from session lows.
Technical levels to watch
Author
Haresh Menghani
FXStreet
Haresh Menghani is a detail-oriented professional with 10+ years of extensive experience in analysing the global financial markets.
