GBP/USD clings to gains above 1.35 handle, closer to 2-month tops

   •  Positive Brexit news continues underpinning GBP.
   •  Persistent USD strength seemed to cap gains.
   •  May/Juncker Brexit meeting in focus. 

The GBP/USD pair held on to its strong gains above the key 1.3500 psychological mark, albeit remained capped below last week's two-month highs resistance near mid-1.3500s.

The pair reversed a bearish gap to the 1.3400 neighborhood and was being supported by today's upbeat UK construction manufacturing PMI print for November. The British Pound got an additional boost from the latest positive Brexit-related news.

However, persistent US Dollar demand, led by optimism over the passage of a long-awaited US tax overhaul bill on Saturday, kept a lid on any further up-move. It would now be interesting to see if the momentum is strong enough to lift the pair through the mentioned hurdle amid relatively thin US economic docket, featuring the only release of factory orders data.

Investors now look forward to news coming out of the UK PM Theresa May and the EU President Jean-Claude Juncker's meeting on a Brexit deal.

Technical levels to watch

Bulls would be aiming for a clear breakthrough mid-1.3500, above which the pair is likely to dart towards reclaiming the 1.3600 handle. On the downside, any pull-back below the 1.3500 handle now seems to find support near the 1.3475-70 region, which if broken could drag the pair back towards 1.3430 intermediate support en-route the 1.3400 handle.