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GBP/USD continues to drip towards 1.30 with a quiet day ahead

6/20/2018, 2:29:51 PMMarket Analysis
GBP/USD continues to drip towards 1.30 with a quiet day ahead

The GBP/USD is trading close to the downside in early Wednesday action, testing into 1.3160 ahead of a quiet London session.

The Sterling stooped lower on Tuesday, falling into a low of 1.3150, and the GBP/USD pair saw very little bounce in the overnight session. Market sentiment has taken a less-than-sunny turn this week over the ongoing trade tariff spat between the US and China, but sentiment is hanging even lower in the UK, where Brexit negotiations continue to grind to a stuttering halt, with key drafts from the June EU summit showing little to no resolutions to the current Irish border issue, and the EU's Bernier is warning people that they need to be prepared for all possible outcomes, including a "hard Brexit" scenario, one where the UK goes ahead with separating from the EU without any kind of trade agreement in place.

Wednesday is another thin showing for the GBP on the economic calendar, and traders' focus will remain locked on the upcoming Bank of England (BoE) rate decision, due on Thursday at 11:00 GMT, where the BoE is expected to hold off once again on a rate increase.

GBP/USD levels to watch

As noted by FXStreet Chief Analyst Valeria Bednarik, "technically, the bearish bias remains strong according to readings in the 4 hours chart, as the pair plunged after failing to recover above its 20 SMA, now heading south almost vertically around 1.3245, while technical indicators have decelerated their declines but hold near their daily lows. Further declines below the daily low will open doors for a steeper decline, with speculative interest then eyeing a test of the 1.3000 level."

Support levels: 1.3150 1.3110 1.3070

Resistance levels: 1.3205 1.3245 1.3290