The pound fell towards the back end of the north American session as the cable lacked domestic drivers with the focus for the pair still firmly rooted in the US federal reserve, USD weakness and political risks stemming from the impending Brexit vote. GBP/USD traded within a range of 1.2726 and 1.2801 before falling from 1.2780 to levels nearer to 1.2750. EUR/GBP fell on the day as an air of caution enveloped the European market after both Germany and France have displayed weaker than expected Q4 growth and PMI numbers. The ominous signs for 2019 growth in the eurozone have pushed the EUR lower, with EUR/GBP falling from 0.9060 to 0.9011.
On the Brexit front, Prime Minister Theresa May has been speaking to union leaders and Labour MP’s in a desperate attempt to get her Brexit deal through the UK parliament, even though a large portion of her own ministers oppose it.
We still see initial intraday support for GBP/USD around the 1.2720 handle, with any topside moves expect to face selling pressure approaching the key psychological 1.2800 level.