GBP/USD depressed around 1.2630

The British Pound is trading almost unchanged vs. the greenback on Wednesday, taking GBP/USD to the 1.2630 region ahead of the opening bell in Europe.

GBP/USD weaker on politics, USD

The continuation of the firm tone around the greenback has relegated Cable to break below post-election lows on Wednesday, albeit finding some decent support in the 1.2600 neighbourhood for the time being. The current decline in spot stays well correlated with the performance of GBP futures, which have been pointing to a deeper pullback.

GBP stays under pressure nonetheless, as the UK political scenario appears uncertain to say the least after a deal between Conservatives and the DUP still remains elusive.

In addition, Brexit negotiations have started on Monday as expected and are poised to be a key driver of the pair’s price action in the months ahead. Negotiators of both parties have agreed to prioritize EU citizens’ rights, the amount of the ‘divorce bill’ and borders, leaving trade issues for a later phase.

In the data space, UK’s public sector finance figures are due along with a speech by BoE’s A.Haldane. Across the pond, existing home sales for the month of May are expected ahead of the DoE’s report on crude oil inventories.

GBP/USD levels to consider

As of writing the pair is up 0.01% at 1.2631 facing the next resistance at 1.2757 (high Jun.20) followed by 1.2811 (55-day sma) and then 1.2813 (20-day sma). On the downside, a breakdown of 1.2603 (low Jun.20) would open the door to 1.2555 (200-day sma) and finally 1.2362 (low Apr.10).