GBP/USD in search of a firm direction, stuck in a range above 1.3100 handle

The GBP/USD pair struggled for a firm direction and see-sawed between tepid gains/minor losses within a 50-pips broader trading range.

The pair swung from session highs near the 1.3150 region and dipped below the 1.3100 handle at the start of a new trading week. The US Dollar edged higher on Monday and prompted traders to take some profits off the table, especially after the pair's recent rally to the highest level since September 2016.

Early dip, however, turned out to be shallow, with the pair catching some fresh bids around the 1.3100 region. The pair moved back to the 1.3120 region but lacked any conviction as investors preferred to remain on the sidelines ahead of the Bank of England meeting on Thursday and the keenly watched NFP data on Friday.

Meanwhile, the market seems to have largely ignored comments by the UK PM Thersa May's spokesperson that free movement of EU citizens to Britain will end in March 2019, which has the potential to derail prospects of a softer Brexit. 

Traders now look forward to the US economic docket, featuring the release of Chicago PMI and existing home sales data for fresh trading impetus. 

Technical outlook

Valeria Bednarik, Chief Analyst at FXStreet writes,  "the 4 hours chart shows that the pair is at a brink of falling further, pressuring a bullish 20 SMA and with technical indicators turning flat around their mid-lines. A downward acceleration below 1.3090, should lead to further intraday declines, first towards the 1.3050/60 region, and once below this last, towards 1.3010. The immediate resistance is 1.3130, with a more relevant one at 1.3158, the yearly high set last week. Gains beyond this last seem unlikely for today, but would result in an approach to the 1.3200 region."