GBP/USD challenges 1.2900 ahead of BoE, looks to PM May

• Cable moves lower and finds support around 1.2900.
• The Bank of England is expected to leave rates unchanged.
• PM Theresa May visits Brussels to meet with EU officials.

The offered bias around the Sterling is now prompting GBP/USD to recede further and briefly test sub-1.2900s levels, or fresh 2-week lows.

GBP/USD looks to BoE

The British Pound is losing ground since last Thursday amidst the broader correction lower since new YTD tops beyond 1.3200 the figure seen in late January.

The re-emergence of the risk-off trade in past sessions has sparked a bout of buying interest in the greenback, motivating GBP-sellers to quickly return to the markets. In addition, renewed and increasing uncertainty surrounding the Brexit negotiations have been also weighing on sentiment, collaborating with the sell-off in spot.

Looking ahead, the BoE is expected to refrain from acting on rates at today’s meeting, while latest news cited the UK government will present the Brexit plan on February 14. Still on Brexit, PM Theresa May will meet with EU officials later today to discuss options on the Irish backstop.

GBP/USD levels to consider

As of writing, the pair is retreating 0.20% at 1.2904 facing the next down barrier at 1.2894 (low Feb.7) seconded by 1.2805 (55-day SMA) and finally 1.2668 (low Jan.15). On the upside, a break above 1.2978 (21-day SMA) will open the door to 1.3000 (high Jan.17) and then 1.3032 (200-day SMA).