GBP/USD: Further downside in play on Brexit jitters?

The GBP/USD pair managed to hold the key support near 1.2720 in the Asian trades this Tuesday, although looks vulnerable amid looming Brexit talks and ongoing broad based US dollar strength.

GBP/USD: BOE Carney’s speech in focus

Despite a promising start to the Brexit negotiations, EU chief Brexit negotiator noted that there is still a long way to reach a final deal, which is likely to keep further downside bias intact in cable. Moreover, the Queen’s Mansion House speech due tomorrow also holds a big risk for the sterling.

Furthermore, ongoing strength seen behind the US dollar on the back of last week’s Fed rate hike and recent hawkish Fedspeaks, also keeps the GBP/USD pair under pressure.

However, the spot manages to derive some support from a minor-correction in the US dollar across the board, while persisting risk-friendly market environment also offers the much-need relief to the GBP bulls.

Looking ahead, we have a data-light calendar for the major, and hence, attention turns towards the next big event for the pound, BOE Governor Carney’s Mansion House speech re-scheduled later today.  

Meanwhile, from the US docket, FOMC member Fischer’s speech and current account data will draw some attention and provide fresh trading impetus.

GBP/USD levels to consider             

Valeria Bednarik, Chief Analyst at FXStreet noted: “In the 4 hours chart, the early advance stalled a few pips below last week's high and the 200 EMA, this last around 1.2820, while technical indicators turned south, and particularly the RSI stands at 44, anticipating some further slides ahead on a break below 1.2705, February's monthly high and the immediate support. Support levels: 1.2705 1.2665 1.2630 Resistance levels: 1.2760 1.2795 1.2830.”