GBP/USD struggles near daily lows, below 1.2900 handle

   •  Fresh Brexit jitters prompt some aggressive selling at the start of a new trading week.
   •  UK manufacturing PMI falls to 25-month lows and adds to the downward pressure.
   •  This week’s other important UK/US macro releases to provide a fresh directional impetus.

The GBP/USD pair kept losing ground through the mid-European session and touched a fresh session low level of 1.2855 in the last hour.

The British Pound took a sharp knock at the start of a new trading week and was being weighed down by the EU chief negotiator Michel Barnier's comments over the weekend, raising concerns over the UK PM Theresa May's Chequers Brexit plan.

This coupled with disappointing UK manufacturing PMI, which fell to a 25-month low level of 52.8 in August, further weighed on the Sterling and kept exerting some additional downward pressure since the early European session.

With today's downfall, the pair has now reversed a major part of last week's strong gains, primarily led by some Brexit optimism led by reports that the EU is prepared to offer Britain a partnership such as there never has been with any other third country.

Meanwhile, a subdued US Dollar price action, amid holiday-thinned liquidity conditions, did little to influence the price-action, with renewed Brexit jitters turning out to be an exclusive driver of the pair's bearish slide for the third consecutive session. 

Moving ahead, this week's other important macro releases, both from the UK and the US, including the keenly watched US non-farm payrolls data, will now be looked upon for some fresh directional impetus. In the meantime, any fresh Brexit related news might continue to drive sentiment and infuse near-term volatility around the British Pound.

Technical levels to watch

The 1.2860-50 region might continue to protect the immediate downside, which if broken is likely to accelerate the slide back towards retesting the 1.2800 round figure mark. On the flip side, any recovery attempt might now confront fresh supply near the 1.2900 handle and is followed by the 1.2930-35 supply zone.