GBP/USD: Fade the rallies on Brexit jitters? UK data - key

The GBP/USD pair extended its overnight retreat into Asia, as the bears fought back control amid fresh Brexit headlines, while attention now turns towards the UK fundamentals due on the cards later today.

GBP/USD flirts with 100-DMA support at 1.3142

The spot remains better offered, as mounting political concerns surrounding the UK May’s leadership and Brexit deal, with the UK Govt having restarted fresh round of Brexit negotiations. Meanwhile, the UK’s Brexit Minister Davis said in a statement overnight that Britain has agreed to set EU "Exit Day" in law.

Moreover, the downward revisions made to the UK growth forecasts for 2017 by the EU, also keeps any recovery attempts capped in GBP/USD. Further, persisting risk-off moods amid tumbling Asian equities and lower oil prices also weigh down on the risk currency GBP.

However, Cable could derive support from ongoing weakness in the US dollar across its main competitors, as the delay in corporate tax cuts until 2010 added to the US tax reform uncertainty.

All eyes now remain on the UK industrial and manufacturing production data slated for release later in the European session, which will be the first significant macro release this week.

GBP/USD Technical View

Valeria Bednarik, Chief Analyst at FXStreet, explained: “In the 4 hours chart, the price surpassed bullish 20 SMA and the 38.2% retracement of its latest daily decline, while technical indicators turned back higher, still around their mid-lines, not enough to confirm further gains ahead. Beyond the mentioned high, the next resistance is the 61.8% retracement of the mentioned decline that comes at 1.3200 with gains beyond it offering then a more constructive bullish outlook. Support levels: 1.3090 1.3060 1.3025. Resistance levels: 1.3175 1.3200 1.3240.”