GBP/USD erases a major part of overnight strong up-move, back near mid-1.2700s

   •  Persistent Brexit uncertainties continue to weigh on the GBP.
   •  A goodish pickup in the USD demand adds to the selling bias.
   •  The latest FOMC meeting minutes eyed for some fresh impetus.

The GBP/USD pair extended its sharp intraday fall and is currently placed at the lower end of its daily trading range, around the 1.2760-55 region.

After an initial uptick to mid-1.2800s, the pair witnessed a dramatic turnaround and erased a major part of the previous session's strong rebound from closer to monthly lows. 

The sudden fall since the early European session coincided with the EU chief Brexit negotiator Michel Barnier's comments, saying that negotiations on Brexit are over and this is the only possible deal.

This was followed by the UK PM Theresa May's statement that any extension to the Article 50 will reopen the negotiations and if she fails to get the Brexit deal past parliament, some preparations for leaving the EU without an agreement would be needed to be undertaken.

Meanwhile, a goodish pickup in the US Dollar demand, despite the ongoing fall in US Treasury bond yields, could also be one of the factors further collaborated towards aggravating the selling pressure surrounding the major.

Despite the Fed Chair Jerome Powell's overnight dovish comments, market participants seemed to await a clear signal that the Fed will eventually pause the current rate hike cycle. Hence, today's release of the minutes from the latest FOMC meeting will play an important role in influencing the USD price dynamics and provide some fresh impetus.

Technical levels to watch

Mario Blascak, FXStreet's own European Chief Analyst writes: “The GBP/USD needs to confirm the break lower moving towards mid 1.2700s for the further potential of sliding lower to 1.2700 to build up first before targeting the cyclical bottom of 1.2662.”