In the first trading week of new year UK released key Economic data like Manufacturing PMI, Net lending to Individual and services PMI which came robust. December manufacturing PMI number came at 54.2 well above estimates of 52.5.Services PMI which represent services sector growth stood at 51.2 vs. 50.7.Data above 50 indicates services sector growth and its expansion.

Even major focus will be on Brexit and its outcome weighed on business sentiments likely business sales and consumer demand remains subdued.

PM May’s exit proposal is set to be voted on by the UK’s House of Commons.PM May want to delay it. As anticipated this time parliament set to reject proposal and if no alternative plan ready by PM set GBP and UK future fragile.

Last week US economic data came better than expected with increase in NFP (Non Farm Payroll) data and unemployment rate.

Major focus shifted to end of the day fed Chairman Powell commentary in which he told that fed will remain flexible and closely watching impact on markets.

This week major events like BOE Gov speech, GDP numbers m/m, US CPI and core CPI data.

Pair closed above 20 days MA, first sign of some relief rally may be possible. Pair early in flash crash made low 1.2453 and recovered. On 4 hourly charts pair just closes above 200 EMA and form bullish reversal pattern at the support area. Trading at higher end of consolidation band.

Pair major resistance zone comes at 1.2850. Pair needs to break above this and momentum needs to pick up. To continue positive momentum pair need to maintain and trade above 1.2680. In higher time frame trend remains still bearish to neutral.

As we approach near event and major data can price activity picks up traders need to maintain proper position sizing with risk appetite as event can bring volatility with wide swings on both sides.

On weekly charts pair trade in sideways band with sloping moving averages. Price action wise price need to trade above 1.2700 levels to test resistance of 1.2850.

Momentum indicator like RSI trading in their mid band level and momentum looks fading, price took support near of 1.2450-1.2470. If pair trade below 1.2700 and close below it then price can made new lows.

As we approach near event and major data can price activity picks up traders need to maintain proper position sizing with risk appetite as event can bring volatility with wide swings on both sides.

Major support and resistance levels as below: