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  • Wednesday kicks off with an early pop for the GBP ahead of the London market open.
  • The midweek remains clear of high-impact data, leaving market sentiment to fend for itself amidst trade wars and Brexit finagling.

The GBP/USD is trading back into the 1.3000 major technical level as the US Dollar downshifts in early Wednesday action, fueled by risk-bullish headlines from the European continent.

Brexit headlines continue to dominate Sterling traders’ headspace, and a steady stream of inconclusive talking heads brandishing their positions on Brexit has seen confidence in the UK continue to wane steadily as glimmers of hope for successful trade talks between the EU and the UK give way to bouts of hard selling as Britain  seems no closer to a workable exit from the European Union than it did immediately following the Brexit referendum.

The Italian  government announced they would be willing to reduce their federal deficit to back below 2% in 2021, and the broader Euro-area saw a brief bounce in market sentiment, taking both the EUR and the GBP briefly higher, and the Pound is now trading just shy of the 1.3000 handle.

The economic calendar is clear of any meaningful UK data for Wednesday, and traders will be keeping an eye out for continued headlines covering both Brexit and political tensions within the Eurozone, and early Wednesday’s pop in the Sterling could find itself getting faded as the day unfolds.

GBP/USD levels to watch

The Pound could be primed for another leg down as technical indicators have reloaded their neutral stances, and as FXStreet’s own Valeria Bednarik noted: “technical indicators have corrected oversold readings before losing directional strength within negative readings, while the 20 SMA is currently crossing below the 200 EMA, reflecting the strength of sellers. Of course, the pair is little about technical readings and all about Brexit, with the pair’s direction depending on which kind of Brexit the market believes it will take place.”

Support levels: 1.2970 1.2940 1.2900                                                

Resistance levels: 1.3010 1.3035 1.3065