- Reports that the EU will grant a three-month Brexit extension extended some support.
- Growing risk of a general election in the UK kept a lid on any strong follow-through.
The British Pound picked up some pace in the last hour and pushed the GBP/USD pair to fresh session tops, albeit lacked any strong follow-through.
The pair continued showing some resilience near the 1.2800 round-figure mark and for now, seems to have stalled its recent corrective slide from five-month tops – levels beyond the key 1.30 psychological mark.
UK election risk capping gains
The fact that the European Union is all set to grant a three-month Brexit extension until January 31, 2020, was seen as one of the key factors lending some support to the British Pound and helped gain some traction.
However, the growing risk of a snap UK election, especially after Prime Minister Boris Johnson failed to win approval for his Brexit timetable, held investors from placing aggressive bullish bets and capped the upside.
It is worth mentioning that the government needs a two-thirds majority to be able to call a general election and hence, the outcome of Monday’s vote might infuse a fresh bout of volatility across the GBP crosses.
On the other hand, the US Dollar failed to capitalize on the early modest uptick, supported by a goodish pickup in the US Treasury bond yields and remained on the defensive amid firming Fed rate cut expectations.
Hence, it will be prudent to wait for a sustained move in either direction before traders start positioning for any meaningful intraday momentum amid absent relevant market-moving economic releases on Monday.
Technical levels to watch
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