GBP/USD holding on to 1.32 as potential BoE rate hike looms ahead

• The Pound is trading steadily near a major technical level after last week saw the GBP/USD flub a bullish attempt.
• This week brings a rate decision from the BoE, and traders will be cautious ahead of the central bank’s action on Thursday.

The GBP/USD is trading flat near the 1.3200 technical level, continuing last Friday’s subdued action after seeing bulls struggle to keep the major pair on-balance through last week’s action, slipping from a peak of 1.3212.

Brexit concerns are holding in the middle for the time being, with negotiations between the UK and the EU slated to resume in mid-August, and Pound bulls will be hoping for a much-needed positive showing from Prime Minister Theresa May, who has personally taken over the negotiations process after her latest Brexit proposal was soundly rejected by the European Union. Hard-line Brexiteers within the UK’s parliament are unsatisfied with the PM’s apparent willingness to make concessions to the EU’s Brexit negotiators, and odds of a hard-landing Brexit scenario in March rest on the shoulders of Britain’s staunch leavers, with PM May caught between two sides, neither of which appears willing to make concessions.

Monday is a quiet showing for the GBP/USD on the economic calendar, with the GFK Consumer Confidence Survey expected for the UK late at 23:01 (forecast to hold steady at -9), as well as Pending Home Sales for the USD at 14:00 GMT, expected to tick up from -0.5% to 1.1%, but Sterling traders this week will be looking ahead to Thursday’s  big showing from the Bank of England (BoE), which is expected to make a 25 bps hike to interest rates this week.

GBP/USD Levels to watch

Sterling bulls continue to struggle against a backdrop of disappointing economic data for the UK and a wobbly BoE, and as noted by FXStreet’s own Valeria Bednarik: “the daily chart for the pair showed that it attempted to recover ground beyond a mild bearish 20 DMA, but failed, with the indicator currently at around 1.3190, providing a dynamic resistance. In the same chart, the Momentum hovers right below its 100 level, while the RSI turned flat around 43, all of which skews the risk toward the downside without confirming it just yet. Shorter term, and according to the 4 hours chart, the pair also presents a neutral-to-bearish stance, having held Friday below a directionless 20 SMA and with technical indicators heading nowhere within negative levels. The bearish momentum will likely increase on a break below 1.3045, a static strong support.”

Support levels: 1.3090 1.3045 1.3010

Resistance levels: 1.3145 1.3190 1.3230