“¢ The prevalent risk-off mood underpins USD’s relative safe-haven status against the GBP.
“¢ Cross-driven weakness further collaborates to intraday downfall amid thin liquidity.
“¢ Market participants now eye Fedspeaks for some short-term trading opportunities.
The GBP/USD pair maintained its offered tone through the mid-European session on Monday, with bears now eyeing a follow-through weakness the 1.3100 handle.
The pair met with some fresh supply at the start of a new trading week and eroded a part of Friday’s upsurge of nearly 200-pips to one-month tops. The initial leg of the positive momentum was triggered by softer US wage growth data and further fueled by optimism over a possible cross-party Brexit agreement.
With investors still awaiting fresh updates from the UK cross-party talks, resuming on Tuesday, the prevalent risk-off mood, led by negative US-China trade-related headlines, boosted the US Dollar’s relative safe-haven status and turned out to be one of the key factors prompting some long-unwinding trade.
Meanwhile, some cross-driven weakness, steaming out of a sharp intraday rebound in the EUR/GBP cross and heavily selling around the GBP/JPY cross, exerted some additional downward pressure amid absent relevant market moving economic releases, either from the UK or the US.
Hence, it would be prudent to wait for a strong follow-through selling before positioning for any further intraday slide. In the absence of any fundamental catalyst, market participants might take cues from scheduled speeches by influential FOMC member in order to grab some short-term trading opportunities.
Technical levels to watch
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