GBP/USD looks to test 1.3550, Brexit jitters back in play?

• DXY bounces in Asia.
• Remains capped below 1.3600.
• Downside opening up towards 1.3500?

The GBP/USD pair reached fresh three-day tops of 1.3586 in Asia, although failed to hold the upside and turned negative heading towards early Europe.   

GBP/USD fades a spike to 1.3586

The renewed weakness seen in the spot can be mainly attributed to resurgent USD demand across the board, as Treasury yields continue to cheer higher wage growth data, with attention now shifting towards the US CPI figures slated for release in the week ahead. The USD index rebounds to flirt with daily tops of 91.76 en route 92 handle.

Moreover, the weekend’s headlines, citing that the UK PM May will appoint a ‘No deal’ Brexit Cabinet Minister to provide regular updates on preparations for leaving the EU without a trade deal, also appears to add to the weight on the pound, as Brexit concerns return to the market.

Further, the latest results of the latest Deloitte CFOs’ survey of the British firm showed increased Brexit dangers, which also collaborates to the downside in the major. Markets now look forward to the UK Halifax HPI data and Fedspeak for fresh impetus amid a data-quiet trading calendar today.

GBP/USD Technical Levels

FXStreet’s Chief Analyst, Valeria Bednarik, writes: “Technically, the daily chart shows that, while the Momentum eased within positive territory, the RSI maintains its bullish slope around 63 and that the price remains well above a bullish 20 SMA, indicating a limited bearish potential at the time being. In the 4 hours chart, the pair presents a neutral-to-bullish stance, holding above a directionless 20 SMA, and with the RSI heading nowhere around 61, but the Momentum aiming higher above its 100 level. Support levels: 1.3520 1.3495 1.3450. Resistance levels: 1.3615 1.3655 1.3690.”