GBP/USD weakens back below mid-1.2700s

Haresh Menghani FXStreet

• Persistent Brexit uncertainties continue to dent sentiment around the GBP.
• A modest USD uptick further collaborates to the ongoing retracement slide.
• Traders eye the latest US monthly jobs report for some short-term impetus.

The GBP/USD pair extended its steady intraday decline and has now weakened back below mid-1.2700s, reversing a major part of overnight goodish up-move.

Rumours that the UK Cabinet discussed the possibility of a second referendum or a softer Brexit if May's plan doesn't pass through the Parliament did provide a short-lived boost to the British Pound on Thursday.

The up-move, however, lacked any strong follow-through as investors seemed reluctant to place any aggressive bets ahead of the crucial Parliamentary vote on the UK PM Theresa May’s negotiated deal on Dec. 11th.

The pair continued with its struggle to sustain/build on the momentum beyond the 1.2800 handle, with a modest US Dollar uptick further collaborating to confine the pair within this week's broader trading range.

In absence of any major market moving economic data from the UK, the incoming Brexit headlines should continue to influence sentiment surrounding the British Pound.

Meanwhile, today's US economic docket, highlighting the release of keenly watched monthly jobs report (NFP), is likely to be overshadowed by uncertainties surrounding the UK’s looming departure from the EU.

Technical levels to watch

Immediate support is pegged near the 1.2725 level and is closely followed by the 1.2700 handle, below which the pair is likely to slide back towards challenging yearly lows, around the 1.2660 region.

On the flip side, the 1.2790-1.2800 region might continue to act as an immediate hurdle, which if cleared might trigger a short-covering bounce towards the 1.2835-40 horizontal supply zone.

Author

Haresh Menghani

FXStreet

Haresh Menghani is a detail-oriented professional with 10+ years of extensive experience in analysing the global financial markets.

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