GBP/USD remains at familiar 1.2750 level as Tuesday's Brexit vote approaches

Markets tensing up ahead of Tuesday's parliamentary Brexit vote.
Cable investors could see reactions from UK GDP, production figures due today, but the GBP can be expected to remain close to near-term averages for Monday.

Joshua Gibson FXStreet

GBP/USD opened the new trading week with a minor bearish gap into the 1.2700 handle before seeing a mild recovery through the Pacific-Asia trading window, closing the door on Monday's starting gap and keeping the Sterling pinned to the 1.2750 level as UK markets remain cautious in the run-up to the House of Commons' vote on Prime Minister Theresa May's latest Withdrawal Proposal, which is expected to face defeat at the hands of parliament.

Tuesday sees the UK parliamentary vote on PM May's current Brexit proposal, and Monday's markets will remain constrained in the London session, but some key data for the UK will be appearing for the day that could see a spark of action on the intraday charts; UK m/m Industrial Production for October (forecast 0.1%, last 0.0%), UK Manufacturing Production for October (forecast 0.0%, 0.2%), and the UK's latest monthly GDP reading (forecast 0.1%, last 0.0%) will all be dropping at 09:30 GMT, and a deviation from the median market expectations could easily see the Cable undergo near-term spikes as uneasy investors remain twitchy ahead of Tuesday's critical Brexit vote.

GBP/USD Levels to watch

Though recent consolidation has seen the GBP/USD pairing lose steam and get hung up in the middle, the Cable's overall technical outlook remains firmly bearish, and as noted by FXStreet's own Valeria Bednarik, "the daily chart shows that it broke the daily descendant trend line coming from November high through lateralization, invalidating the relevance of the break. In the mentioned chart, a bearish 20 SMA has rejected advances, while technical indicators resumed their declines within negative ground, keeping the risk skewed to the downside. Shorter term, and according to the 4 hours chart, the pair offers a neutral-to-bearish stance, as it closed a few pips below a flat 20 SMA, as technical indicators maintain downward slopes below their midlines."

Support levels: 1.2695 1.2660 1.2620

Resistance levels: 1.2775 1.2805 1.2840

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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