GBP/USD surrenders intraday gains, flat-lined around mid-1.3300s

• GBP/USD struggled to preserve early gains and witnessed a modest intraday pullback.
• Not so optimistic Brexit comments by Von der Leyen took its toll on the British pound.
• A weaker greenback helped limit the downside ahead of US macro data, FOMC minutes.

The GBP/USD pair quickly retreated over 50 pips in the last hour and dropped to fresh daily lows, around the 1.3330 region, albeit lacked any follow-through selling.

The pair struggled to capitalize on its early uptick, instead met with some fresh supply near the 1.3385 region and drifted into the negative territory during the early European session. The sharp pullback came after not so optimistic Brexit-related comments by the European Commission president Ursula von der Leyen.

The top eurocrat warned that a Brexit deal is far from certain as the disagreement over access to Britain's fishing waters continues to block progress. Von der Leyen also said that there had been genuine progress in Brexit talks but not enough to produce a significant breakthrough on key sticking points, including state-aid rules.

With very little time left before the Brexit transition periods end on December 31, the headlines took its toll on the British pound and turned out to be one of the key factors behind the GBP/USD pair's sudden fall. However, the prevalent selling bias surrounding the US dollar extended some support and helped limit deeper losses for the major.

The latest optimism over the progress toward remedies for COVID-19, the smooth beginning of President-elect Joe Biden's transition to the White House remained supportive of the upbeat market mood. This was evident from a positive tone around the equity markets, which continued undermining the greenback's relative safe-haven status.

From a technical perspective, the GBP/USD pair's repeated failures ahead of the 1.3400 mark could be seen as signs of bullish exhaustion. That said, the lack of any follow-through selling, rather the emergence of some dip-buying at lower levels support prospects for additional gains. This warrants some caution before placing aggressive directional bets.

Market participants now look forward to a flurry of top-tier US macro data for some short-term trading opportunities. Wednesday's US economic docket highlights the releases of the preliminary (second estimate) GDP report, Durable Goods Orders, Initial Weekly Jobless Claims and final Michigan Consumer Sentiment Index for November.

The key focus, however, will be on the latest FOMC meeting minutes, which will be scrutinized for the possibility of any further policy easing by the Fed in December. The Fed's policy outlook will influence the USD price dynamics, which, along with fresh Brexit updates should assist investors to determine the near-term trajectory for the GBP/USD pair.

Technical levels to watch