GBP/USD consolidates in a narrow range around 1.3300 handle

The GBP/USD pair extended its consolidative price action and remained confined in a narrow trading band around the 1.3300 handle. 

The pair had a rather lackluster start to a new trading week and was seen digesting last week's strong gains, led by news report that the EU may offer a two-year Brexit transition deal to the UK. Even a modest pickup in the US Dollar demand failed to provide any strong impetus, with the pair struggling for a firm directional bias through mid-European session. 

Investors seemed refraining from aggressive bets and preferred to wait for fresh Brexit headlines coming out of the UK PM Theresa May and Brexit Secretary David Davis' surprise meeting with the EU commission chief, Jean-Claude Juncker, and the EU’s top Brexit negotiator, Michel Barnier. 

Apart from any Brexit news-led volatile moves, important UK macroeconomic releases - including inflation figures, employment report and monthly retail sales data, should make this a big week for the GBP traders.

In the meantime, the release of Empire State Manufacturing Index from the US might help traders to grab some short-term trading opportunities.

   •  GBP/USD remains constructive above 1.3190 – UOB

Technical levels to watch

"The high set last week at 1.3314 is key, as if somehow the pair accelerates through the level, the rally can extend towards the 1.3400 region. Below 1.3260 on the other hand, the pair can correct lower, eyeing the 1.3215 level" writes Valeria Bednarik, Chief Analyst at FXStreet.