“¢ The lack of progress in the UK cross-party Brexit talks keeps a lid on the attempted up-move.
“¢ A modest pickup in the USD demand further adds to the intraday pullback from daily tops.
“¢ Traders now eye the only scheduled release of US core PCE price index for some impetus.
The GBP/USD pair failed to capitalize on the early uptick to multi-day tops and is currently placed at the lower end of its daily trading range, around the 1.2920 region.
The pair struggled to build on its recent bounce from over two-month lows set last Thursday, rather lacked any bullish conviction amid concerns over the lack of progress in the UK cross-party talks to break the Brexit deadlock.
The latest comments by the UK PM Theresa May’s spokesman reaffirmed that there hasn’t been any Brexit breakthrough, which coupled with a modest pickup in the US Dollar demand exerted some pressure on the major.
With investors looking past Friday’s weaker details from the US GDP report – especially softer inflation data, a weaker trading sentiment around equity markets now seemed to benefit the greenback’s relative safe-haven status.
The downside, however, remained cushioned amid firming market expectations that the Fed will stick to its cautious stance when it announces the latest monetary policy decision at the end of a two-day meeting on Wednesday.
Hence, it would be prudent to wait for a strong follow-through selling before positioning for any further intraday slide as the focus now shifts to the US economic docket – highlighting the only scheduled release of core PCE price index.
Investors this week will also confront important UK/US macro data, which coupled with the latest monetary policy updates by the Fed and the BoE might play an important role in determining the pair’s next leg of a directional move.
Technical levels to watch
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