- The Cable is backing into last week's lows as bulls remain off-balance.
- A Brexit meeting between the UK's May and the EU's Juncker is expected for today, promising plenty of Brexit headline fodder.
The GBP/USD is trading sideways ahead of Wednesday's London market session, skidding across the floor near 1.2785 after Tuesday saw a resurgence of the Greenback across the broader markets, as well as a revival of Brexit-bearish headlines, with Spain's Gibraltar attempting to oust the Northern Ireland border as the next impossible-to-solve issue.
Spain has demanded that oversight on the island of Gibraltar be included in an EU-UK Brexit agreement, with the Spanish government demanding that clarity on Gibraltar be a bilateral issue, threatening to veto the current draft deal if their demands aren't met, and a fresh round of Brexit bearishness can be expected as the two sides continue to run into new walls in their race against the clock to rough-in a divorce deal. The Gibraltar factor poses a significant delay to Brexit proceedings, and will significantly hamper both sides' ability to pull positive headlines out of today's EU-UK meet and greet.
Little else remains on the data docket for Wednesday, but the UK's Prime Minister Theresa May and the European Commission's Chief, Jean Paul Juncker are slated for a meeting today for Brexit deal discussions, and statements from both sides can be expected as the duo try to salvage market sentiment with soothing words. The Brexit meeting is expected to be tabled around 16:30 GMT.
GBP/USD Levels to watch
The Cable is stuck in bear mode, with the downside continuing to open up on still-crumbling investor confidence, and as FXStreet's Chief Analyst Valeria Bednarik noted, "technical readings in the 4 hours chart maintain the risk skewed to the downside, as the pair is now below a bearish 20 SMA after spending the day struggling around it, while technical indicators resumed their declines, the Momentum extending below its mid-line and the RSI currently at 38. Should the pair fell below 1.2765, a test of the November low at 1.2723 is back on the table, while a relief rally would need to send the pair above 1.2880 to support a more positive outlook ahead."
Support levels: 1.2765 1.2725 1.2680
Resistance levels: 1.2845 1.2890 1.2530