GBP/USD dips below mid-1.3000s, fresh session low

   •  Brexit uncertainties continue to dent sentiment surrounding the British Pound.
   •  Today’s disappointing release of UK construction PMI adds to the selling bias.
   •  A follow-through USD uptick exerts some additional downward pressure on the pair.

The GBP/USD pair held on to its offered tone through the early North-American session and is currently placed at the lower end of its daily trading range, just below mid-1.3000s.

The pair quickly reversed an early uptick to the 1.3100 neighbourhood and drifted into negative territory for the third consecutive session in reaction to dismal UK construction PMI, which fell to a 10-month low in January. 

Against the backdrop of the stalemate situation over the Irish backstop, the data reaffirmed the effects of Brexit uncertainties on businesses and further dented the already weaker sentiment surrounding the British Pound.

As Mario Blascak, FXStreet's own European Chief Analyst explains: “The truth is that there are no immediate plans in place for the issue of the Irish border backstop and therefore there is no date for May to start her renewed discussion in Brussels.”

This coupled with a follow-through greenback buying interest, lifting the key US Dollar Index to session tops near mid-95.00s, further collaborated to the pair's intraday slide of over 50-pips. 

The buck remains supported by Friday's data that showed manufacturing activity surprisingly picked up in January and got an additional boost at the start of a new trading week from a goodish pickup in the US Treasury bond yields.

It would now be interesting to see if the pair is able to find any buying interest at lower levels or the current pull-back marks the end of the recent upsurge as market participants start repositioning for the BoE Super Thursday.

Technical outlook

“Technically the GBP/USD is moving within a sideways trend after breaking the downward sloping long-term trend on the upside. The technical oscillators like the Relative Strength Index (RSI) and Slow Stochastics (SS) are both pointing lower with Slow Stochastics making a bearish crossover in the Overbought territory indicating future price declines,” Mario added further.