GBP/USD plummets to monthly lows, now eyeing 1.29 handle

   •  Brexit uncertainties continue to dent sentiment surrounding the British Pound.
   •  A goodish pickup in the USD demand exerts some additional downward pressure.

The GBP/USD pair extended overnight retracement slide from levels beyond the key 1.30 psychological mark and tumbled to near three-week lows in the last hour.

After yesterday's attempted recovery move, triggered by news that the EU is willing to offer a UK-wide customs union as a way around the Irish backstop, the pair came under some renewed selling pressure on Wednesday and extended this week's rejection slide from 100-day SMA. 

The latest optimism quickly faded as investors seemed convinced that the UK PM Theresa May will not accept the proposal as she wants a UK-wide customs backstop to be legally binding and included in the divorce bills. 

Against the backdrop persistent Brexit uncertainties, resurgent US Dollar demand, despite the ongoing slide in the US Treasury bond yields, exerted some additional downward pressure and further collaborated to the pair's slide back closer to monthly lows.

It would now be interesting to see if the pair is able to find any buying interest at lower levels or continues with its bearish trajectory amid rising speculation of a potential leadership challenge in May’s leadership of Tory Party.

With Brexit headlines turning out to be an exclusive driver of the pair's momentum, market participants now look forward to the UK PM Theresa May's speech with her MPs later today. 

Technical levels to watch

The 1.2900 handle now seems to act as an immediate support, which if broken is likely to accelerate the fall towards its next major support near the 1.2850 horizontal zone.

On the flip side, any attempted recovery now seems to face immediate resistance near the 1.2960 area, above which the pair is likely to aim towards reclaiming the 1.30 handle.