GBP/USD staggering near 1.32 ahead of the UK's first-ever monthly GDP reading

Sterling hitting a softer tone in early Tuesday action.
Brexit headlines are poseing a thorny problem for Sterling traders as the UK prepares to deliver the first round of monthly GDP figures.

Joshua Gibson FXStreet

The GBP/USD is trading down near 1.3240 ahead of Tuesday's London market session, and the Sterling continues to be plagued by Brexit concerns.

Prime Minister Theresa May's new 'soft Brexit' proposal has been a shot to the foot of the PM's current leadership team, with EU leaders in Brussels already unlikely to accept the new "third option" proposal, and May's UK cabinet fracturing over the halfway solution, with the UK's Brexit Minister Boris Johnson resigning over the weekend, along with Brexit Secretary David Davis and three other parliamentary Brexit ministers all resigning in protest over the new proposals, which hard-line Brexiteers say betrays the original referendum results.

With Brexit concerns continuing to put a drag on the GBP's chart action, Tuesday sees a raft of economic data, all dropping at 08:30 GMT. May's m/m Industrial Production is expected to come in at 0.5% (last -0.9%), and the m/m Manufacturing Production figure for May is also expected to improve to 0.7% (last -1.4%), but the headline figure for the day will be May's m/m GDP figure for the UK, forecast to come in at 0.3%. This will be the first publishing of monthly GDP figures for the UK, and this particular metric could see irregular market impact as traders grapple with digesting the new metric format.

GBP/USD levels to watch

Markets are twisting on the Sterling, which held a bullish market position until Brexit fears shattered the market quiet, and as FXStreet's own Valeria Bednarik noted on the GBP's technical stance, "technically, the 4 hours chart shows that the pair is currently battling around a still bullish 20 SMA, while technical indicators have stalled their declines around their mid-lines, suggesting that the market likes the softer-Brexit option, as long as May's head doesn't roll, and that they are not yet willing to unwind Pound longs."

Support levels: 13120 1.3190 1.3155

Resistance levels: 1.3285 1.3320 1.3365

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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