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GBP/USD eases from tops, remains capped below 1.39 handle

   •  Once again faces rejection ahead of the 1.3900 handle.
   •  Brexit concerns keep a lid on the post-NFP up-move. 
   •  A goodish pickup in the US bond yields prompts some selling.

The GBP/USD pair trimmed some of its early gains and quickly retreated around 20-25 pips from session tops, touched in the past hour. 

The pair gained some positive traction at the start of a new trading week and jumped back closer to the post-NFP swing highs in the last hour. A follow-through US Dollar weakness, led by Friday's sluggish wage growth data, was seen as one of the key factors driving the pair higher.

The momentum, however, lacked any strong conviction and once again stalled ahead of the 1.3900 handle. Prolonged concerns around Brexit talks continue to dent sentiment surrounding the British Pound, with bulls now struggling to build on the early up-move.

Meanwhile, a goodish pickup in the US Treasury bond yields seems to have further collaborated towards keeping a lid on the pair's bullish momentum and prompt some selling at higher levels. 

It would now be interesting to see if bulls are able to maintain their dominant position or the pair's rejection slide from the 1.3900 neighborhood aggravates the long-unwinding pressure amid empty UK/USD economic docket

Technical levels to watch

Any meaningful retracement is likely to find support near the 1.3800 handle and is followed by a strong horizontal support near the 1.3765-60 region. On the upside, the 1.3890-1.3900 area might continue to act as an immediate resistance, above which the pair is likely to aim towards testing a short-term descending trend-line hurdle, currently near the 1.3925-30 region.
 

Author

Haresh Menghani

Haresh Menghani is a detail-oriented professional with 10+ years of extensive experience in analysing the global financial markets.

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