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  • Sterling trading close to major levels as markets brace for the BoE.
  • Even a positive BoE showing will see Brexit headlines quickly return to the forefront.

The GBP/USD has completely stalled out near the 1.3100 major technical level as the Bank of England (BoE) gets set to deliver their latest rate call today at 11:00 GMT.

The BoE will be delivering their widely-anticipated interest rate call today, but disappointing economic data for the UK has thrown the previously-guaranteed rate hike for August into question, and the central bank has thus far remained tight-lipped about whether or not they will allow themselves to be pushed off their hawkish perch by bad data for the second time in 2018, especially after yesterday’s Markit Manufacturing PMI for the UK dipped to 54.0, coming in underneath market forecasts.

Brexit concerns also remain close at hand, with little positive developments on the horizon with Brexit’s official date fast approaching next March. Prime Minister Theresa May has personally taken over the reigns of the negotiation process, a move that is unlikely to smooth things over in her fractured political party as hard-line Brexiteers accuse the PM of bowing to EU pressures without putting up enough of a fight for British sovereignty, a concept that European leaders in Brussels have little time or patience for.

GBP/USD Technical Analysis

With the major pair flopping back onto the 1.3100 handle this week, action has been constrained tightly by central bank expectations, and the GBP/USD has drifted through the entire month of July with little to no directional momentum on the cards, and the possibility of a second pullback from the BoE is leaving Sterling traders in the lurch.

GBP/USD Chart, 15-Minute

Spot rate:   1.3103
Relative change:   -0.10%
High:   1.3124
Low:   1.3096
Trend:   Flat to bearish
Support 1:   1.3088 (current week low)
Support 2:   1.3054 (61.8% Fibo retracement level)
Support 3:   1.2956 (two-week low; technical bottom)
Resistance 1:   1.3124 (current day high)
Resistance 2:   1.3172 (current week high)
Resistance 3:   1.3212 (previous week high)