GBP/USD looking up to 1.31 to kick off the new week

A quiet week on the calendar until Wednesday's UK inflation reading.
Brexit headlines to run the GBP's week as Tories approach a vote on PM May's Brexit plan.

Joshua Gibson FXStreet

The GBP/USD is drifting upwards in early Monday action, lifting towards 1.3100 ahead of London's week opener with Brexit continuing to hang heavy over Sterling traders.

The UK Tory party is expected to vote on Prime Minister Theresa May's struggling Brexit plan which has already been returned face-down by European Union leaders in Brussels, and the hard-line Eurosceptic conservatives are also expected to turn their noses up at PM May's third option proposal, leaving the PM treading water in trade negotiations with the EU with little support from her own homefront.

The economic calendar is looking thin this week, and the GBP markets see little meaningful action on the docket until Wednesday's CPI reading for the UK, where bulls will be hoping for a positive read to encourage continued upwards momentum.

GBP/USD Levels to watch

The Sterling-Dollar pairing is seeing buyers struggling against the US Dollar's recent revival on trade headlines, and as FXStreet's own Valeria Bednarik noted: "technically, the daily chart shows that the pair has retreated from a fresh 6-week high not far below the 50% retracement of the 2016/18 rally. The pair remains above a bullish 20 SMA, while technical indicators are easing the Momentum nearing its mid-line and the RSI still close to overbought levels, limiting chances of a steeper decline, which will depend on Brexit headers rather than on dollar's strength. Shorter term, and according to the 4 hours chart, the technical picture is quite alike, as the decline found intraday buying at around a firmly bullish 20 SMA, while technical indicators retreated within positive levels, the Momentum still heading lower but the RSI now consolidating around 55."

Support levels: 1.3050 1.3010 1.2970

Resistance levels: 1.3085 1.3125 1.3170

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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