GBP/USD drops to near 3-week lows, below mid-1.2900s ahead of US data

• GBP/USD continues to be weighed down by fears of a no-deal Brexit.
• A modest pickup in the USD demand added to the intraday selling bias.
• Technical selling below the 1.30 handle further accelerated the downfall.

The selling pressure around the British pound picked up some additional pace in the last hour and dragged the GBP/USD pair to near three-week lows, around the 1.2930 region in the last hour.

The pair failed to capitalize on its early attempted recovery move, rather met with some fresh supply near the 1.3030 region and drifted into the negative territory for the sixth consecutive session during the early European session on Monday.

Brexit uncertainty continues to weigh on GBP

The sterling continues to be weighed down by growing market concerns of a no-deal Brexit. This coupled with a modest US dollar uptick, supported by an intraday rebound in the US Treasury bond yields, further collaborated to the pair's intraday slide.

The greenback remained well supported by Friday's mostly upbeat US macro data – the final Q3 GDP growth figures, an upward revision of the University of Michigan's Consumer Confidence Index and Personal Income/Spending data for November.

Meanwhile, possibilities of some short-term trading stops being triggered on a sustained break below the key 1.30 psychological mark further seemed to have aggravated the selling pressure and led to the latest leg of a sudden fall over the past hour or so.

Hence, some follow-through weakness, possibly towards challenging the 1.2900 handle, now looks a distinct possibility. Market participants now look forward to the US economic docket, highlighting the release of Durable Goods Orders data, for a fresh impetus.

Technical levels to watch