- Brexit and US elections are the trigger-words for Tuesday's major markets.
- Any last-minute announcements on Brexit talks could easily overshadow mid-term elections, but a lack of movement on either side regarding Ireland's border sees that as unlikely.
The GBP/USD is continuing to struggle near the 1.3050 level heading into Tuesday's London market session as a notable lack of a workable Irish border solution to Brexit negotiations sees Sterling traders swarming on headlines that are heavy on hope but thin on details as EU-UK talks continue to go nowhere.
GBP/USD analysis: running against the clock, but far from a solution on Irish backstop
Tuesday is a political day for the markets, with little functional data on the economic calendar, but a steady stream of Brexit headlines in the UK and US mid-term election results due later in the day, and the GBP/USD sees plenty of opportunities to experience broader market volatility.
This week opened on premature hopes fueled by rumours that the UK could be inches away from securing a workable Brexit agreement, but as the week winds out its increasingly clear that this is not the case, and the clock is quickly running out of time for the two sides to reach equilibrium, and the Irish border disagreement remains a critical, but unsolvable issue. On the US side, Americans are voting in critical mid-term elections throughout the day, and polls show President Donald Trump's Republican party struggling to hang onto voters that swept them into the President's office in 2016.
GBP/USD levels to watch
The GBP has seen plenty of support on Brexit hopes, but according to FXStreet's Valeria Bednarik, there's plenty of room for buyers to retain control of the pair until meaningful information begins to cross the wires: "from a technical point of view, the Pound is relatively strong, as seems speculative interest is willing to believe a deal will be achieved. The 4 hours chart shows that the pair spent the day consolidating above a flat 200 EMA, while the 20 SMA keeps advancing below the larger one, now catching up with the price after last week's run. The Momentum indicator in the mentioned chart has spent the day easing within positive ground but the RSI advanced modestly, holding near overbought readings, indicating that bulls retain control despite being unwilling to push the pair higher."
Support levels: 1.3020 1.2980 1.2935
Resistance levels: 1.3085 1.3130 1.3180