- The USD gains some traction in reaction to upbeat regional manufacturing index.
- Brexit uncertainties/dovish BoE expectations continue to weigh on the Sterling.
- The focus now shifts to Tuesday’s UK jobs report/US monthly retail sales figures.
The GBP/USD pair extended its steady intraday decline and dropped to fresh session lows, around the 1.2525 region during the early North-American session.
The pair failed to capitalize on last week's goodish bounce from six-month lows and started retreating from a resistance marked by the 1.2575-80 supply zone, with a modest pickup in the US Dollar demand exerting some additional downward pressure in the last hour.
The greenback ticked higher in reaction to stronger-than-expected Empire State Manufacturing Index, showing that business activity rebounded to 4.3 in July as compared to the previous month's negative reading of 8.6 - marking the lowest level of the index since October 2016.
The pair has now reversed a major part of Friday's positive move to 1-week tops to snap three consecutive days of winning and was further pressurized by persistent Brexit-related uncertainties and speculations that the BoE will soon join other major central banks in easing monetary policy.
It would now be interesting to see if the pair is able to defend the key 1.2500 psychological mark as the focus now shifts to Tuesday's important releases of UK jobs report and the closely watched US monthly retail sales figures ahead of the Fed Chair Jerome Powell's scheduled speech.
Technical levels to watch
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