GBP/USD refreshes session tops, inching back closer to 1.2900 handle

The buying interest around the British pound picked up some additional pace in the last hour and lifted the GBP/USD pair to fresh session tops, around the 1.2875-80 region.

The pair caught some fresh bids on the first day of a new trading week and recovered a major part of the previous session's downfall to over one-week lows, triggered by the dismal UK flash PMI prints for November and resurgent US dollar demand.

Focus remains on UK political, trade developments

The UK Prime Minister Boris Johnson's pledge to get the Brexit done and bring a deal to leave the European Union back to the Parliament before Christmas was seen as one of the key factors that underpinned demand for the British pound.

This comes on the back of the incoming UK election polls, which have been indicating a majority for the Conservative Party and led to a modest weekly bullish gap opening for the major amid a subdued US dollar price action.

Despite a goodish intraday pickup in the US Treasury bond yields and remained US-China trade optimism, the greenback struggled to gain any meaningful traction and remained supportive of the pair's uptick through the early European session.

The US President Donald Trump increased hopes of a trade deal on Friday and said that a deal with China was “potentially very close” and also indicated that he might not sign a bill passed by the Congress that supports Hong Kong.

Moving ahead, the incoming UK political/Brexit-related headlines might continue to play a key role in influencing the pair's momentum on Monday amid absent relevant market-moving economic releases, either from the UK or the US.

Technical levels to watch