GBP/USD on the defensive, below mid-1.2800s amid UK election uncertainty

• UK election uncertainty continues to weigh on the British Pound.
• Bulls seemed rather unimpressed by a subdued USD demand.

The GBP/USD pair remained depressed through the early European session on Friday and was seen struggling near daily lows, around the 1.2825-35 region.
 
The pair failed to capitalize on the overnight late rebound from one-week lows and met with some fresh supply on the last trading day of the week – marking its second consecutive and also the third day of a negative move in the previous four – amid risk of a snap election in the UK.

Weighed down by renewed uncertainties

It is worth recalling that the UK government is likely to propose a motion next Monday. Moreover, the UK Prime Minister Boris Johnson said on Thursday that the lawmakers should back an early general election on December 12 to get more time to study his Brexit deal with the European Union (EU).
 
This coupled with the fact that the EU has reportedly delayed a decision on granting a three-month Brexit extension and will wait until Monday, or possibly Tuesday, before announcing the final verdict. This added a bit of uncertainty and kept exerting some pressure on the Sterling.
 
Meanwhile, the price action seemed rather unaffected by a subdued US Dollar price action. Against the backdrop of firming market expectations that the Fed will cut interest rates again in October, a weaker tone around the US Treasury bond yields kept the USD bulls on the defensive.
 
It, however, remains to be seen if bears are able to seize near-term control or the pair continues to show some resilience at lower levels amid diminishing odds of a no-deal Brexit and absent relevant market-moving economic releases – either from the UK or the US.

Technical levels to watch