The GBP/USD pair started the new week on a weaker note and reversed part of Friday's modest recovery from the vicinity of the 1.3200 level, or over three-week lows. The spot prices traded around the 1.3280-1.3275 region during the Asian session, down 0.20% for the day amid a broadly stronger US Dollar (USD).

The US announced on Sunday that a trade deal with China has been reached following high-stakes trade talks in Switzerland over the weekend. This, in turn, helped ease market concerns about a recession in the US. Moreover, the Federal Reserve's (Fed) hawkish pause earlier this month lifted the USD to a more than one-month high, which in turn, exerted pressure on the GBP/USD pair.

Meanwhile, the US and the UK signed a limited trade agreement on Thursday. Moreover, the Bank of England's (BoE) cautious tone, stating that interest rates will remain tight for as long as necessary to ensure inflation risks subside, might hold traders from placing aggressive bearish bets around the British Pound (GBP) and keep a lid on any meaningful depreciating move for the GBP/USD pair.

Even from a technical perspective, the rangebound price action seen over the past three weeks or so warrants some caution before positioning for any firm near-term direction. Investors might also opt to wait for speeches from influential BoE MPC members and Fed officials. Investors will look for cues on the future policy outlook, which in turn will provide a fresh impetus to the GBP/USD pair. (Newsmaker23)

Source: FXstreet