• The Sterling kicked off the week with a bullish jump, but Brexit headlines are keeping GBP traders hesitant.
  • UK PM May to face further opposition as pro-Brexit Tories edge towards making an outright leadership challenge.

The GBP/USD saw a stumble early in the new trading week, with the pair's bullish gap into 1.3318 saw a quick drop into 1.3286 following headlines that the UK's Brexit Secretary David Davis has resigned from his position in protest of Prime Minister Theresa May's No10 "soft Brexit" proposal. The GBP/USD is now trading near the 1.3300 major level, and Monday's bullish momentum has come up against a fundamental boundary.

The UK's David Davis has been confirmed to have resigned from his position as Brexit Secretary following the UK cabinet's agreement to PM May's new Brexit proposal, with hard-line Brexiteers including Davis angry over the agreement, claiming that the new proposals betray the original referendum result. 

The Sterling heads into the new week with an early challenge to recent bullish momentum, and Sterling traders will be wary of upcoming challenges to Prime Minister May's leadership from hard-liners within the UK's Tory party.

GBP/USD levels to watch

according to FXStreet Chief Analyst Valeria Bednarik: "readings in the daily chart favor additional gains, as the pair ended well above a mild bearish 20 SMA, while technical indicators head north within positive territory, at their highest since last April. In the 4 hours chart, a bullish 20 SMA keeps leading the way higher, attracting buyers on intraday pullbacks, while technical indicators also maintain their bullish slopes, but below this month highs. The 200 EMA in this last time frame comes at 1.3310, while a relevant high is located at 1.3314, making of the 1.3310 an immediate and strong resistance."

Support levels: 1.3250 1.3210 1.3170

Resistance levels:  1.3315 1.3350 1.3390

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