GBP/USD fades a spike to 1.2060 on risk-off, UK PM May eyed

The GBP/USD pair managed to survive above 1.20 handle so far this Tuesday, although the recovery ran out of legs near 1.2060 region, as risk-off prevails ahead of the UK PM May’s speech due later in the day.

GBP/USD making lower tops on hourly charts

The cable is back in the red zone, after a brief peek into positive territory, as markets refrain from placing any directional bets on the GBP ahead of the main risk event for the upcoming months - the UK PM May’s speech, which is rumored to be scheduled around 11.00GMT.

The UK Press has outlined 12 key points on which PM May will hold her speech on Brexit, signaling that the UK will not have "partial" membership of the EU "that leaves us half-in, half-out." Her comments pointing towards a Hard-Brexit will pose a big economic slowdown threat for the UK economy and hence, will heavily weigh on the pound.

However, markets may not leave any opportunity to unwind the GBP shorts if the UK PM May’s speech disappoints markets and does not have a huge negative bearing on GBP/USD pair.

Meanwhile, the immediate focus now remains on the UK CPI data, which will be published ahead of the UK PM May’s speech.

GBP/USD Levels to consider            

In terms of technical levels, upside barriers are lined up at 1.2095/99 (5-DMA/ daily R1), 1.2157 (10-DMA) and 1.2200 (zero figure). While supports are aligned at 1.1988 (multi-week low) and 1.1850 (post-Flash crash low) and below that at 1.1800 (key psychological support).