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   “¢   Cross-driven strength provides a minor lift in the last hour or so.
   “¢   Pickup in the USD demand /Brexit concerns to cap any strong up-move.

The GBP/USD pair quickly reversed a dip to 1.2730 area and spiked around 35-pips in the past hour, albeit seemed lacking any strong follow-through.

The latest leg of an uptick to a four day high level of 1.2766 lacked any obvious catalyst and could be attributed to some cross-driven strength. The ongoing slide in the EUR/GBP cross, triggered by some political jitters from Italy and widening Italy-German 10-year yield spread, seems to be only factors providing a minor lift to the British Pound.

However, a goodish pickup in the US Dollar demand, though failed to gain any follow-through traction amid the ongoing slide in the US Treasury bond yields, kept a lid on any further up-move. This coupled with Brexit uncertainties, which had been weighing on the British Pound since the beginning of this month, might further contribute towards capping any meaningful up-move.

In the latest Brexit news, the EU said this Monday that negotiations will take place on Tuesday and Wednesday this week and the UK Brexit secretary Raab will also meet with EU chief Brexit negotiator Barnier on Tuesday. Investors this week will also confront the release of a series of technical notices for no-deal preparation by the UK government and might trigger a fresh bout of volatility across GBP pairs.

Technical levels to watch

A follow-through buying interest has the potential to continue lifting the pair further towards reclaiming the 1.2800 handle en-route last week’s swing high, around the 1.2825-30 region. On the flip side, the 1.2720-15 region, closely followed by the 1.2700 handle, now seems to protect the immediate downside, which if broken might turn the pair vulnerable to resume with its prior depreciating move.