GBP/USD: Upside remains capped near 1.2670 on Brexit anxiety, thin trades

• Bears guard the 1.2670 fencing, as the US dollar attempts a comeback.
• Mounting concerns over Brexit could knock-off the Sterling to 1.2605 amid thin trading and lack of fresh catalysts.

The bounce in GBP/USD lost legs near the 1.2670 level, now consolidating in a tight range just ahead of the midpoint of the 1.26 handle, as the bears fight for control amid a fresh uptick in the US dollar across its main competitors while looming Brexit concerns keep the prices in check.

The US dollar witnessed volatile moves in the Asian trades, having reversed sharply its overnight rally to a high of 97.11 to print session lows of 96.77 before recovering ground to test the 97 handle. The latest leg higher it the greenback against its major peers can be mainly attributed to an uptick in S&P 500 Futures while markets remain unperturbed by the partial US shutdown.

On the GBP-side of the equation, mounting fears over a disorderly Brexit as we remain about 90 days away from the Brexit, continue to weigh down on the sentiment around the Cable. The Insitute of Directors (IoD) warned that the UK business leaders’ confidence has sunk to 18-month lows as Brexit approaches and little progress remains seen.

Looking ahead, amid thin volumes and a lack of fresh fundamental news from both the UK and the US, the pair will remain at the mercy of the broader market sentiment and USD dynamics.

GBP/USD Technical Levels