GBP/USD fumbles the 1.34 handle as UK Average Earnings close in

Sterling leaning towards the downside ahead of UK's Average Earnings figures, expected to hold flat.
Brexit votes this week could hamper PM May's efforts for securing a clean EU exit.

Joshua Gibson FXStreet

The GBP/USD is trading down on the week, testing 1.3360 as the upcoming Tuesday session brings the UK's first foray into economic data for the week.

The Sterling tapped into a new low this week as the pair's recovery to 1.3471 appears to be over, and the GBP/USD is shifting lower in sharp jolts as sentiment over Brexit developments continues to sour, with the UK's Prime Minister, Theresa May, locked in a grim battle between hard-line Brexiteers and EU leadership in Brussels. This week sees a rash of key voting items over Brexit in the UK's parliament, and depending on how the voting goes, PM May could see an even longer fall down the Brexit hole with the British parliament set to force itself into the negotiation process.

Average earnings for the UK are due at 08:30 GMT today, with the headline earnings (excluding bonuses) expected to print at 2.9%, in-line with the previous figure. The UK's economy is battling back from a worse-than-expected downturn in macro figures for the first quarter of 2018, and the Bank of England (BoE) is desperately hoping for a quick turnaround in order to get their plans for prompt rate hikes back on track.

GBP/USD Technical Analysis

The Sterling has been cycling into subsequent lows in rough trading, and hourly indicators remain biased towards further downside momentum, while the pair's overall technical stance leans lower, with action capped off by the recent turnaround from 1.3471.

Spot rate: 1.3360
Relative change: -0.10%
High: 1.3383
Low: 1.3346

Trend: Flat to bearish

Support 1: 1.3344 (current week's low)
Support 2: 1.3294 (previous week's low)
Support 3: 1.3204 (major psychological handle, major technical bottom)

Resistance 1: 1.3441 (current week's high)
Resistance 2: 1.3471 (technical recovery top)
Resistance 3:1.3503 (161.8% 1-Day Fibonacci level)

Author

Joshua Gibson

FXStreet

Joshua joins the FXStreet team as an Economics and Finance double major from Vancouver Island University with twelve years' experience as an independent trader focusing on technical analysis.

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