GBP/USD struggles to pull away from daily lows, remains below 1.29

The GBP/USD pair fell to a fresh session low at 1.2860 in the first half of the NA session and is now having a tough time retracing its losses as the greenback remains resilient against its rivals. At the moment, the pair is trading at 1.2870, losing 0.18% on the day.

Despite the retreat, today's price action seems to be merely technical and fails to signal the pair's next direction in the short-term. The greenback's modest gains on Monday continue to cap any potential gains as the US Dollar Index is gaining 0.12% at 95.90. However, the index is unlikely to break above the 96 psychological level unless it's supported by a fundamental development. Today's only relevant data from the U.S., the Fed's Labor Market Condition Index, came in at 1.5 in June, missing the market consensus of 2.5 but didn't receive any market reactions.

Tomorrow's economic docket will feature speeches by BoE MPC Members Haldane and Broadbent, which could be the next catalyst for the pair. It will be interesting to see if the officials recognize last week's disappointing data from the U.K. A change of tone towards a dovish direction could put the cable under some heavy selling pressure. 

Technical outlook

1.2860 area, where the 38.2% Fib. retracement of June 21/June 30 uptrend and the 50-DMA is located, seems to have formed a strong base for the pair in the near-term. With a daily close below that level, the pair could drop further to 1.2800 (psychological level/Fib. 50%) and 1.2750 (100-DMA). On the upside, resistances could be seen at 1.2900 (psychological level), 1.2970 (Jul. 7 high) and 1.3030 (Jun. 30 high). 

• GBP/USD neutral, between 1.2800/1.2975 – UOB