• A modest USD uptick exerts some follow-through pressure on Monday.
• Traders seemed reluctant to place bets ahead of the latest Brexit update.
The GBP/USD pair quickly recovered around 30-pips from an intraday low level of 1.2831 and is currently placed at the top end of its daily trading range.
The pair extended Friday's rejection slide from the key 1.30 psychological mark, or two-month tops, and kept losing ground through the early European trading session on the first day of a new week.
With plenty of Brexit uncertainties still on the table, a modest pickup in the US Dollar demand, supported by a follow-through uptick in the US Treasury bond yields, was seen exerting some fresh downward pressure.
However, expectations for an extension of Article 50, despite repeated denials by the UK government, and the market stance of a diminishing hard Brexit risk extended some support to the British Pound.
Meanwhile, the latest leg of a goodish bounce could further be attributed to some positive comments by the Polish Foreign Minister, proposing to limit the Irish backstop to 5 years to unblock the Brexit negotiations.
Despite the uptick, traders still seemed reluctant to place any aggressive bets and preferred to hold back ahead of the UK PM Theresa May's Brexit Plan B, expected to be revealed at 1530 GMT.
Technical levels to watch
Mario Blascak, FXStreet's own European Chief Analyst writes: “The correction mode on GBP/USD is underlined by the upmove exhaustion with the technical oscillators also pointing downwards. The Slow Stochastic made a bearish crossover within the Overbought territory indicating further downside potential to build up with the GBP/USD returning to the old range of 1.2800-1.2900.”
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