Cable sits just above the 1.2800 handle to start the session
Sellers are still in near-term control for now despite the pound retracing some of last week's losses to start the new week.
The dovish tilt from the BOE last week allowed sellers to drive cable below 1.2800 towards the end of the week but we are seeing price creep back up just above the figure level ahead of key UK data later today.
The Q3 preliminary GDP report will be released and should reaffirm a decent rebound in the UK economy, averting a technical recession.
That said, Brexit uncertainty should continue to cloud the longer-term outlook and this shouldn't lead to a much meaningful rebound for the economic prospects in the UK.
As such, I would argue that any solid jump in the pound from the data later should not be sustainable as the main focus rests on the December election rhetoric.
The Tories remain favourite but so far polling has been less suggestive of them increasing their margin and that may leave some room for fear/uncertainty in the coming weeks.
Therefore, Q3 GDP data later may present some good news for the pound but it wouldn't be the springboard for a move back towards 1.3000 unless election uncertainty dissipates over the next few weeks.
For key technical levels, watch out for the 100-hour MA (red line) @ 1.2839 as an area for sellers to lean on while buyers will keep towards the Friday low of 1.2769 and the 200-day MA @ 1.2704 if price falls further.
