GBP/USD trying to hang onto the 1.30 level ahead of a quiet Monday

The Sterling is once again drifting lower on renewed Brexit angst.
US inflation figures are due later in the week, though market sentiment will be the key driver in the meantime.

Joshua Gibson FXStreet

The GBP/USD opens the new trading week testing towards the downside of the 1.3000 major technical level, kicking around the psychological handle in Monday's early trading ahead of a thin calendar that sees Brexit concerns returning to the forefront.

Monday sees little meaningful data on the economic calendar, and the only notable event slated for today for the GBP/USD is the UK's y/y BRC Like-For-Like Retail Sales for July will be clocking in later in the day at 23:01 GMT, and is expected to print at 0.4%, a notable tick underneath the previous reading of 1.1%.

Brexit has returned to the front of the line for GBP headwinds, and concerns over the potential for a no-deal or hard Brexit are once again back on the rise, as the UK's Brexit leaders continue to bemoan the European Union's unwillingness to budge on negotiating terms or show preference t the UK, refusing to allow the hard-line leavers the opportunity to cherry-pick which trade markets they remain in and which they pull out of, stonewalling current talks and trying to force the UK into an all-or-nothing scenario.

For the USD this week will be focused on the upcoming Consumer Price Index figures, though the reading isn't due until Friday and the economic calendar sees little meaningful data for the US.

GBP/USD Levels to watch

The Sterling continues to lean heavily into the bearish camp as broader markets find little reason to begin buying the GBP back up, and as FXStreet's own Valeria Bednarik noted, "the pair is technically bearish, given that in the daily chart, the 20 DMA turned modestly lower while attracting selling interest all through the week. The Momentum indicator in the mentioned chart stands flat below its 100 level, but the RSI heads lower, around 36, leaning the scale toward the downside. Shorter term, the downward potential is stronger, as in the 4 hours chart, the pair keeps moving away from a strongly bearish 20 SMA, while technical indicators remain well into the red, with modest downward slopes."

Support levels: 1.2970 1.2925 1.2885

Resistance levels: 1.3045 1.3085 1.3120

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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