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- Pound enjoys relief rally earlier on Monday

- But selling interest expected to resume

- Traders await next steps in Brexit saga

The British Pound was seen hovering on the 1.14 level against the Euro late Monday as the GBP/EUR exchange rate looked to snap a record losing streak.

Pound Sterling Live's week-ahead forecast for a short-term bounce in the GBP/EUR exchange rate appeared to have been playing out earlier in the day with the exchange rate going 0.40% higher than it where it started this week's account.

However, the gains do appear to have faded ahead of the London close. 1 GBP buys 1.1399 Euros on the interbank market, banks are quoting in the region of 1.11-1.12 we believe, independent transfer specialists are quoting towards 1.13.

"Recent Brexit-driven decline of Sterling slowed, at least temporary. Political uncertainty on the fate of the Brexit deal and on the replacement of Theresa May remains as high as it has ever been. Still, Sterling investors are awaiting next steps in the process. Sterling is holding near recent lows against the Euro and the Dollar," says Mathias Van der Jeugt, an analyst with KBC Markets.

If the exchange rate can eke out a gain from here and close Monday in the green then we will have witnessed the end to its worst streak of daily losses in history.

If not, then the steady grind lower will have notched up an eleventh consecutive day of losses for the Pound.

Any bounce-back in Sterling remains a technical phenomenon at this stage, we believe and will likely be short-lived.

"Our near-term studies continue to warn of a pullback," says Robin Wilkin, a cross-asset strategist with Lloyds Bank.

After last weeks break through the 1.1520-1.1450 range lows, Wilkin says only a rise through 1.15-1.1540 is now needed to suggest this was a false break, returning the market to the previous upper range.

Until then, rallies "are viewed as corrective" for a further move towards next support in the 1.1312 region says Wilkin.

Our technical editor Joaquin Monfort noted that the exchange rate was now oversold on two counts: stochastic and RSI.

With both indicators suggesting an oversold exchange rate, the conditions for a recovery were ripe.

"There is a heightened risk of a short-term pull-back as on some readings the exchange rate is oversold; but eventually the dominant short-term bear trend, which has taken hold over May, will probably continue to drag the exchange rate lower," said Monfort.

There is little by way of Brexit news out on Monday that would support the thesis that a material pro-GBP development is behind the bounce back.

So if technicals are behind the pullback, those looking at the exchange rate over the next few days and weeks should remain aware that the broader technical backdrop behind Sterling has deteriorated notably this May.

"An eventual continuation lower is probable," says Monfort. "The first downside target for GBP/EUR is at 1.1315 where the February lows are situated. Eventually we see a probably move all the way down to a target at 1.1200, and perhaps even 1.1100 and the lower regions of the broader multi-year range shown in the weekly chart below."

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