GBP/USD back on the defensive, S1 playing out its role at 1.2750

• GBP/USD has resumed the downside in the late part of the North American session, falling from the 1.2780 resistance within the day's volatility.
• GBP/USD is currently trading at 1.2745 within the chop and range of between 1.2726 and 1.2801. 

GBP/USD is back on the defence as bears take back control on a day that has been choppy within a wide consolidative range lacking in domestic drivers and focus staying on the Fed, greenback, political risks and trade. 

As far as the Fed goes, we have had another series of Fed speakers, with the most attention paid to Fed Chairman Powell’s speech to the Economic Club of Washington early this morning where he had reiterated the “waiting and watching, patient and flexible” message. We also heard from Fed's Bullard and Evans. Bullard said that the Fed had reached the end of the road on rate hikes while Bullard warned that the trade was very real and tangible. 

On the Brexit front, PM May has been speaking to Labour MPs and union leaders in a bid to try to get her deal through the Commons, where scores of her own MPs oppose it. PM Abd of Japan visited May today, and she and Abe have pledged to build on the trade agreement between Japan and the EU to secure an "ambitious bilateral arrangement" between Japan and the UK after Brexit.

EUR/GBP drops 

Meanwhile, there is an air of caution around the European market, and even Powell mentioned that today. Both Germany and France are exhibiting worrying signs of weakness in Q4, and PMI new orders data indicates that this will at least extend into early 2019. The ECB minutes also pointed to downside risks. European bourses were mixed on the day. The DAX rose 0.3%, the CAC 40 was down 0.2% and the FTSE 100 managed a 0.5% rise. The euro gave back some of its firmer tone, and EUR/GBP fell from 0.9060 to a low 0.9011. 

GBP/USD levels

Valeria Bednarik, the Cheif Analyst at FXStreet, explained that the pair turned neutral in the short-term, as the 4 hours chart shows that technical indicators lack directional strength, stuck around their midlines, while the price is battling and also directionless 20 SMA:

"The 200 EMA continues providing an intraday support at around 1.2720, with scope for deeper slides on a break below it. Selling interest will also seize their chances on attempts to advance beyond the 1.2800 figure."