GBP/USD: Bears in control amid Brexit drama, focus shifts to UK GDP

• Pound bears continue to command GBP/USD moves near 1.2930 amid Brexit pessimism.
• Upcoming UK GDP and developments at Brexit could provide a fresh impulse to the moves.
• The 1.2965 trend-line acts immediate resistance for the pair with 1.2830 acting as nearby support.

The GBP/USD pair trades little changed around 1.2930 before European session on Monday. The quote came under pressure on Reuters report that the UK PM Theresa May rejects opposition’s appeal to UK-wide customs union, raising another bar for smooth Brexit process at home. Next in the investor’s radar is fourth quarter UK GDP growth whereas developments concerning Brexit can continue playing background music to the moves.

The fourth quarter (Q4) British GDP growth is likely to soften to 0.2% from 0.6% rise during the previous quarter. On a yearly basis, the growth figure may soften to 1.4% during the last quarter of 2018 compared to Q4 2017 expansion of 1.5%.  

Other than GDP, December month release of manufacturing production also gains Pound traders’ attention. The manufacturing activity indicator may reverse its previous contraction of -0.3% with +0.1% growth on a monthly basis while softening the dip to -0.7% from -1.1% YoY figure.

At the Brexit front, the UK Brexit minister Stephen Barclay is scheduled to meet EU negotiator Michel Barnier on Monday. The two sides may discuss presently hanging issue of Irish border in order to move forward towards a raw plan that can be put forward in British parliament later in the month.

With the Brexit clock ticking faster without any strong developments, weak economics at home could open further downside for the GBP/USD pair.

GBP/USD Technical Analysis

Almost two-week long descending trend-line restricts the immediate GBP/USD upside around 1.2965, a break of which can propel the prices to 1.3030 & 1.3055 resistances.

On the downside, the 1.2830 and the 1.2800 could offer immediate support  to the pair during its further declines prior to highlighting 1.2680 rest-point.