GBP/USD headed to 1.3350?

Currently, GBP/USD is trading at 1.3451, down -0.39% on the day, having posted a daily high at 1.3573 and low at 1.3431.

GBP/USD has started to stabilise after a drop from 1.3520 to the aforementioned low while markets continue to unwind the pro-Brexit headlines of last week after May's disappointing speech made on Friday. 

May was expected to announce some key details as to the UK's proposals for a transitionary period of two years whereby the UK would at least pay some form of contribution towards Brussels' proposed EUR60b. However, in light of a rather ambiguous speech, sterling has topped and is breaking to the downside 1.34 the figure. 

BoE: MPC are still in a difficult position - Rabobank

At the same time, Moody’s downgraded the UK’s sovereign rating to Aa2 Friday to round off a fairly disappointing day for PM May following her Florence Brexit “reboot” speech, which, as analysts at Scotiabank noted,  seemed to do no such thing. They added, "Moody’s cited weaker UK public finances and the erosion in medium-term economic strength which will likely result from the leaving the EU as the justification for the downgrade."

Moodys downgraded the UK's sovereign rating - Scotiabank

In respect of the cross, "While we revised up our GBP forecasts modestly to match our less dovish call on the BoE, we continue to expect GBP to lose ground vs. the EUR medium term due to political uncertainty and sluggish UK economic growth relative to the Eurozone," argued analysts at Rabobank.

GBP/USD levels

Technically, 1.3443 remains as the supporting area ahead of a deeper retracement to 1.3350. On the flipside, a break of the 1.3580/90 resistance area opens up 1.3640/70 as a double Fibo target and the 2014-2017 downtrend target.