GBP/USD plummets to 1.2920 level, reverses Tuesday’s positive move

• GBP/USD failed to capitalize on the previous session’s strength to one-week tops.
• Fears of a no-deal Brexit continue to keep a lid on every attempted positive move.
• Rebounding US bond yields revived the USD demand and added to the selling bias.

The GBP/USD pair continued losing ground through the mid-European session and refreshed daily lows, around the 1.2925-20 region in the last hour.

A combination of factors led to some renewed weakness on Wednesday and forced the pair to erase a major part of the overnight strong gains to one-week tops – levels just above the key 1.30 psychological mark.

GBP/USD weighed down a modest USD uptick/no-deal Brexit fears

As investors assessed the economic impact of the coronavirus outbreak, a sharp intraday turnaround in the US Treasury bond yields from all-time lows helped ease the recent bearish pressure surrounding the US dollar.

This comes on the back of fears that Britain would crash out of the European Union at the end of the transition period and turned out to be one of the key factors that prompted some fresh selling around the major.

Even from a technical perspective, the pair's inability to capitalize on the attempted recovery and repeated rejection from 50-day SMA suggests that the near-term bearish pressure might still be far from being over.

Hence, some follow-through weakness, back towards testing sub-1.2900 level en-route YTD lows around mid-1.2800s, remains a distinct possibility amid absent relevant market-moving economic releases from the US.

Technical levels to watch

Any subsequent slide is likely to find some support near the 1.2900 mark, below which the pair is likely to accelerate the fall further towards challenging YTD lows, around mid-1.2800s. On the flip side, the 1.30 mark might continue to act as immediate strong resistance and 50-day SMA, around 1.3030-35 region should cap any further gains