• Reviving USD demand prompts some fresh selling at higher levels.
• GBP further weighed down by uncertainty over the upcoming Brexit talks.
• Carney’s speech eyed for some short-term trading impetus.
The GBP/USD pair's early European session rebound quickly ran out of steam near the 1.4030 level, with bears once again eyeing a break below the key 1.40 psychological mark.
The pair found some support around sub-1.40 level during the early European session but struggled to gain any follow-through traction amid a modest pickup in the greenback demand. In fact, the key US Dollar Index was now seen building on Friday's goodish rebound from over 3-year lows and has been one of the key factors weighing on the major.
Meanwhile, uncertainty surrounding the upcoming Brexit talks, expected to start in Brussels on Tuesday, was seen prompting traders to lighten their GBP bullish bets and further collaborated to the pair's follow-through retracement to a three-day low.
Currently trading around the 1.3985-80 region, the pair has now retreated over 160-pips from Friday's two-week high level of 1.3145 level, also marking a short-term descending trend-line resistance extending from January's post-Brexit highs through early Feb. tops.
The US markets are closed on Monday in observance of President’s day holiday and hence, the key focus would remain on the BOE Governor Mark Carney speech, which might influence the GBP price dynamics and provide some short-term trading opportunities.
Valeria Bednarik, American Chief Analyst at FXStreet writes: “The pair presents a modest downward potential short-term, according to technical readings in the 4 hours chart, as it's developing below its 20 SMA, and the 50% retracement of its latest decline, while technical indicators head marginally lower, but within neutral territory, as multiple holiday's worldwide keep volumes at their lows.”
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