GBP/USD drops below 1.29 on escalating fears of no-deal Brexit

• British Prime Minister Theresa May cancels the press conference.
• BBC claims there may be a no-confidence vote on Thursday.
• US Dollar Index recovers above 97.

Earlier in the day, the GBP/USD pair rose to a fresh daily high at 1.3035 on hopes of the cabinet meeting producing a positive outcome. However, with British Prime Minister Theresa May's office confirming reports of the press conference getting cancelled tonight, the pair came under a heavy selling pressure and broke below the 1.30 mark. As of writing, the pair was trading at 1.2898, losing 0.62% on a daily basis.

Additionally, the EU27 said that they have ended their discussions on Brexit and haven't received any word from London yet to hint at further conflict in the cabinet. Furthermore, BBC's political editor Laura Kuenssberg in a tweet claimed that there could be a call for a no-confidence vote tomorrow and added that some Brexiteers were switching their position from wait-and-see to moving against PM May. Now markets are waiting for PM May to deliver a short statement at the end of the meeting.

Commenting on Brexit developments, "The extreme sensitivity of the sterling to Brexit news is not only a function of the currency's ultimate destination depending on whether it gets cabinet approval, but on scarce liquidity. It's a very dangerous time to play in the cable," FXStreet Senior Analyst Joseph Trevisani said.

Technical levels to consider

On the upside, the pair could face the first resistance at 1.3000 (psychological level) ahead of 1.3040 (daily high/50-DMA) and 1.3150 (Nov. 8 high). Supports, on the other hand, could be seen at 1.2880 (daily low), 1.2825 (Nov. 12 low) and 1.2775 (Oct. 26 low).