GBP/USD bounces off lows, still deep in the red below 1.2900 handle

   •  Negative Brexit headlines exert some heavy pressure at the start of a new week.
   •  Comments by May’s spokesman prompt some short-covering amid oversold conditions.

The GBP/USD pair trimmed a part of its early steep decline and quickly recovered around 50-pips from 1-1/2 week lows touched in the last hour. 

The pair stalled its intraday slump and managed to find some support around the 1.2830-25 region after some soothing comments by the UK PM Theresa May's spokesman. 

James Slack, briefing the press this Monday, said that the Cabinet has backed PM in moving forward on Brexit and there was nothing to suggest that other ministers are thinking about resigning. 

The uptick, however, seemed lacking any strong conviction and might still be categorized as a corrective/technical bounce amid near-term oversold conditions on hourly charts. 

Meanwhile, the likelihood of an EU Brexit summit is now pushed to December 13-14, which might continue to fuel uncertainty and eventually keep a lid on any meaningful up-move in the near-term.

Elsewhere, the US Dollar build on the post-FOMC upsurge, hitting over 17-month tops on Monday, and did little to ease the bearish pressure, with the incoming Brexit headlines turning out to be an exclusive driver of the pair's momentum on the first day of a new trading week. 

Technical levels to watch

Any subsequent recovery is likely to confront immediate resistance near the 1.2900 handle, above which the pair is likely to make a fresh attempt towards clearing the 1.2945-50 supply zone. 

On the flip side, the 1.2845-40 region now seems to protect the immediate downside, which if broken might accelerate the slide further towards challenging the 1.2800 round figure mark.