• Brexit uncertainty prompts some fresh selling at higher levels.
• US building permits/housing starts beat expectations.
• US bond yields lending support to the USD.
The GBP/USD pair quickly reversed early strong gains to 2-week high and dropped to fresh session lows during the early NA session.
The pair's early retracement from session tops, near the 1.3260 level, was led by comments by the UK Brexit minister David Davis, saying that Germany & France are blocking progress over trade-talks.
Meanwhile, today's better-than-expected US housing market data, coupled with a goodish pickup in the US Treasury bond yields helped the US Dollar to recover majority of its early lost ground, led by the latest US political jitters, and further collaborated to the pair's slide to 1.3170 level in the past hour.
According to the US data released just a while ago, housing starts recorded a strong 13.7% m-o-m growth, rising to 1.290 million annualized pace in October. Adding to this, building permits also bettered expectations and increased at an annual pace of 1.297 million, resulting in 5.9% m-o-m rise.
With the key US housing market data out of the way, a follow-through retracement, led by some additional long unwinding, now seems a distinct possibility.
Technical outlook
Valeria Bednarik, American Chief Analyst at FXStreet writes: "Advances are likely in the case of a dollar's sell-off, with short-term resistances from here at 1.3225 and 1.3260. Below the mentioned 1.3180 region, on the other hand, the pair could near 1.3100 before the week is over."
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