GBP/USD hoping for a grasp on 1.2900 ahead of Tuesday's UK Earnings report

Sterling once again slips the 1.2900 level as Brexit hopes turn back into angst once more.
Key UK data for today could further derail GBP bulls if the numbers miss the mark.

Joshua Gibson FXStreet

The GBP/USD is trading into 1.2875 after making a run at the 1.2900 handle in the early Tuesday window, but renewed Brexit concerns are seeing the Pound get hobbled in the broader marketscape, with previous hopes for a last-minute deal appearing this week once again getting dashed on the rocks.

Early Tuesday action sees the GBP getting a relief bounce as the US Dollar pauses across the board, but a continued bull-run is looking unlikely unless today's UK earnings figures can distract investors from the notable lack of forward momentum on Brexit proceedings.

09:30 GMT today sees the latest quarterly Average Earnings for the UK, with Earnings plus bonuses for the annualized quarter into September expected to print at 3.0%, a tick healthier than the previous quarter's 2.7%, while Average Earnings excluding bonuses is expected to remain steady at 3.1%.

On the Brexit front, hopes for the skeleton of a workable Brexit deal to be presented at the EU's Brexit summit this month, and with UK Prime Minister Theresa May being forced to cancel an emergency Brexit cabinet meeting amidst backlash from within her own parliament, hopes are waning for any progress to be announced before December's meeting as well, and steadily-deflating expectations for a soft-Brexit scenario are going out the window, and taking the Pound's exchange rate with them.

GBP/USD Levels to watch

The Cable heads into Tuesday's data reading with a heavy heart, and as FXStreet's own Valeria Bednarik noted, "the risk remains skewed to the downside, as in the 4 hours chart, technical indicators corrected extreme oversold conditions before resuming their declines, now maintaining their bearish slopes, while the price develops well below its moving averages. The 20 SMA gains downward traction and is about to cross below the 200 EMA, this last at around 1.3015. The decline is set to extend as long as Brexit negotiations remain in a stalemate on the Irish border."

Support levels: 1.2825 1.2790 1.2750

Resistance levels: 1.2880 1.2935 1.2960

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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