GBP/USD flirting with daily lows, below mid-1.2100s

• Persistent fears of a no-deal Brexit continue to weigh on the British Pound.
• A modest pickup in the USD demand prompts some selling at higher levels.
• Sustained weakness below 1.2100 needed to confirm a fresh breakdown. 

The GBP/USD pair faded an early European session bullish spike to the 1.2180-85 region and has now dropped to the lower end of its daily trading range - back below mid-1.2100s.
 
The pair continued with its struggle to register any meaningful recovery and failed ahead of the 1.2200 round figure mark amid increasing odds of a no-deal Brexit on the new extended deadline of October 31. In absence of any fresh Brexit-related headlines, Thursday's downfall could be solely attributed to a modest pickup in the US Dollar demand.

Rebounding US bond yields underpinned the USD

Against the backdrop of some stability in the global financial markets - as depicted by a positive trading mood around equity markets - a goodish rebound in the US Treasury bond yields provided a minor lift to the greenback and turned out to be one of the key factors behind the pair's intraday pullback of over 40-pips.
 
Despite the slide, the pair has still managed to hold its neck above a support marked by the lower end of near-term trading range held over the past one week or so. Hence, it will be prudent to wait for a convincing breakthrough the 1.2100 handle before traders start positioning for a slide towards challenging the key 1.20 psychological mark.
 
Meanwhile, Thursday's US economic docket features second-tier releases of the usual initial weekly jobless claims and Final Wholesale Inventories - might also fail to provide any meaningful impetus to the major, which seems unlikely to provide any meaningful impetus or produce any short-term trading opportunities.

Technical levels to watch