GBP/USD on the wrong side of 1.3000 as Brexit angst returns to the fold

Cable traders are getting pushed to the ropes as months of Brexit grandstanding and headline driving looks set to fall apart.
A thin economic docket for Tuesday will see Brexit coverage remain front and center.

Joshua Gibson FXStreet

The GBP/USD is trading into 1.2960 ahead of Tuesday's London market session after slipping below the 1.3000 technical handle in Monday's bearish action.

Hopes for a workable Brexit deal are getting dashed on the rocks of reality once again, and despite UK Prime Minister Theresa May vehemently insisting that a deal is "95% complete", broader markets are deciding that close enough isn't going to cut it, and Eurosceptics within the UK's own parliament have found a new ally in the DUP, or Democratic Unionist Party of Ireland, and the Tory Brexiteers have newfound support for their motion next Wednesday that will see the UK parliamentary session move to make the EU's proposed Irish border proposal illegal, further driving a stake through the heart of PM May's Brexit negotiations strategy.

With Brexit at the forefront once again, Tuesday's economic calendar is looking thin for the upcoming session, though the Bank of England's (BoE) own Mark Carney will be speaking in Canada at the Annual Machine Learning and Market for Intelligence Conference being hosted by the University of Toronto. Carney's segment is set to kick off at 15:20 GMT.

GBP/USD levels to watch

The Sterling is set for a continued leg lower on the technical side of things, according to FXStreet's own Valeria Bednarik: "the 4 hours chart for the GBP/USD pair indicates that the negative momentum could prevail, moreover if the pair remains below the 1.3000 figure. In the mentioned chart, the 20 SMA heads sharply lower, now breaking below the 200 EMA, this last a strong dynamic resistance that the pair was unable to break earlier in the day, while technical indicators remain well into negative ground, the RSI now consolidating around 1.3000. October low comes at 1.2921, with a break below it exposing 1.2880, the 61.8% retracement of the 2016/18 rally."

Support levels: 1.2955 1.2920 1.2880

Resistance levels: 1.3000 1.3040 1.3085

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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