GBP/USD: Hammond speech does little to bolster bulls, markets remain focused on Brexit

• The GBP/USD continues to coil around 1.2800 as UK investors remain tepid over Brexit.
• A data-thin calendar for the day will see continued emphasis placed on Brexit headlines, as well as potential broad-market moves following the EU’s GDP reading.

The GBP/USD is still trading into the 1.2800 major technical level after Monday’s action saw the Cable whipsaw into 1.2850 before stumbling down to 1.2790 to open the new trading week, and traders are heading into Tuesday’s London market session on the cautious side as Brexit headlines continue to drag the GBP down.

Monday saw the UK’s Exchequer Chancellor Phillip Hammond fail to inspire Pound bidders despite echoing UK Prime Minister Theresa May’s recent calls that “austerity is over”, and Hammond’s annual budget speech sees large question marks over the holes that would be left in the increasingly likely event of a no-deal Brexit, and Pound bulls are expected to remain on the ropes as headlines surrounding the UK’s departure from the European Union continue to go nowhere.

Tuesday is a data-light day for the Sterling, leaving investors to fret over the lack of momentum on Brexit proceedings, though knock-on volatility could be expected towards the London midday when Europe sees GDP figures at 10:00 GMT, and a missed reading for the EU’s still-struggling growth figures could see risk appetite take a further swing lower as US Dollar buying remains a popular activity in the broader fx space.

GBP/USD levels to watch

The Cable remains firmly entrenched on the bearish side of things, and as noted by FXStreet’s own Chief Analyst Valeria Bednarik, “the pair remains near the multi-month low of 1.2776 hit last week, and technically bearish according to intraday technical readings, as the pair is below a strongly bearish 20 SMA, which capped an early attempt to advance and is currently around 1.2840, while technical indicators turned south, the Momentum accelerating to fresh daily lows and the RSI currently at 28, in line with further slides ahead particularly on a break below 1.2775.”

Support levels: 1.2775 1.2740 1.2700

Resistance levels:1.2850 1.2880 1.2925