GBP/USD tests below 1.27 ahead of UK CPI, US Retail Sales

The GBP/USD is trading below the 1.2700 major technical level heading into Wednesday's London market session.

Brexit headlines continue to lean heavily into alarming territory, with more and more warnings flashing that the UK could be heading for an outright hard Brexit, with odds of a messy exit shooting up recently with the UK parliament's Conservative Brexiteers threatening to outright reject any trade deal presented by the Chequers.

On the macroeconomic side, the UK's unemployment rate fell to 4.0% yesterday, a forty-three year low for the indicator, though the rest of the UK's job report was notably less cheery, with the number of people not working and not looking for work increasing by more than expected, while earnings also missed market expectations.

Today at 08:30 GMT will see the UK's latest CPI reading, and markets are expecting a slight improvement to 2.5% for the year into June, versus the previous reading came in at 2.4%, while the US side will be seeing US Retail Sales at 12:30 GMT, which are expected to tick lower to 0.3% from 0.4%.

GBP/USD levels to watch

and according to FXStreet's own Valeria Bednarik, the Sterling is "looking poised to extend its decline in the upcoming sessions, as in the 4 hours chart, technical indicators resumed their declines, the Momentum after failing to re-enter positive territory, and the RSI now heading south around 30. The same chart shows a failed attempt to recover above a bearish 20 SMA, which maintains its sharp bearish slope."

Support levels: 1.2680 1.2645 1.2610                                                                                       

Resistance levels: 1.2755 1.2795 1.2830