GBP/USD: running out of steam, headed back towards 1.2775/59 support zone?

Currently, GBP/USD is trading at 1.2924, down -0.06% on the day, having posted a daily high at 1.2980 and low at 1.2920.

Analysts at Scotiabank explained that GBP/USD had been testing fresh two week highs, but was the slowest climber of it  G4 peers vs the greenback and its lack of conviction has lead to a sell-off towards a break below the 1.29 handle. For now, 1.2920 is supporting the major but GBP remains vulnerable to headline risk as market participants assess this week’s round of Brexit negotiations. 

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Meanwhile, however, the near-term domestic risk is limited ahead of Friday’s manufacturing PMI with some risk from Wednesday’s release of mortgage approvals explained analysts at Scotiabank. "Risk reversals are showing a slight moderation in the premium for protection against GBP weakness," the strategists at Scotiabank explained further.

GBP/USD levels

GBP/USD: bearish/neutral technical outlook, 1.29 to break? - Scotiabank

"Short Term Trend (1-3 weeks): We are looking for a slide back to the 1.2775/59 support zone," explained analysts at Commerzbank. "Minor resistance sits at the 1.2979 June high. We are still of the opinion that the 1.3267 current August high was the end of a medium term up move. While trading below the next lower 1.3031/49 May and August 11 highs overall downside pressure will be maintained. Further resistance sits at the 1.3126 July 18 high."