GBP has been weakened by USD after rejecting off the 1.30 area with a daily close. Certain spikes were observed not long ago. However, GBP was not able to sustain momentum and fell.

The UK economy is going through hard times now as most of the British companies are cancelling their projects. Brexit uncertainty and worries about a deal or no deal withdrawal are weighing down the US economy. In case of no deal scenario, the the business sector index is likely to fall sharply. Business investment was plummeting throughout 2018 as companies waited for clarity on Brexit. Brexit supporters think that the UK should leave the EU now with no agreement because it is likely to boost the business sector which will revert to trade on World Trade Organization terms. Earlier, this month, BoE Governor Mark Carney said the business investment was likely to continue to be weak, but that there should be an improvement – and reduced reliance on consumers – if Brexit took place smoothly. Moreover, Britain's political unrest is rising as Theresa May is facing pressure to abandon her Brexit deal and quit as British prime minister within days.

Today, the UK CPI report is going to be published. The reading is expected to increase to 2.2% from 1.9%. The PPI Input is expected to rise to 1.1% from -0.2%. The public sector Net Borrowing is expected to grow to 5.2B from 0.8B and the Core CPI is expected to go up to 1.9% from 1.8%.

The US dollar is pressured following the release of weak economic data. However, it managed to sustain momentum over GBP. The disappointing report on existing home sales may be due to the record high home prices than lack of supply. Recently, US Existing Home Sales report idicated a decrease to 5.19M from 5.21M. The reading was expected to grow to 5.35M. Additionally, the Fed discussed a better way to manage the U.S. economy to hit the central bank's inflation target is to tolerate much higher price increases in some years to counter the weaker ones. The Fed has failed for a decade to even reach that 2% level could leave people skeptical it is serious about even more aggressive strategies. That is just one of many hurdles policymakers noted recently that face any overhaul of the central bank's policy framework.

New strategies were debated at the Fed would make up for low inflation with faster inflation in the future, possibly prices increase of as much as 3 or even 4% in some years, Evans said, a level he said markets may be skeptical the Fed would ever allow. Moreover, according to FED member Rosengren uncertainty surrounding the U.S.-China trade dispute adds downside risk to his forecast for the economy, giving the central bank another reason to be patient as it keeps interest rates steady. This week Core Durable Goods Orders report is going to be published. A decrease to 0.1% from 0.3% is expected. Report on the Durable Goods Orders indicated a drop to -2.0% from 2.6%. Today, traders are awaiting FOMC meeting minutes. Commentary reiterating officials' wait-and-see approach amid a raft of global uncertainties may cool rate cut hopes.

In case of strong economic data, the pound sterling is likely to bounce off. The US dollar may retreat following the weak economic data. Thus, certain correction and volatility are expected.

Now let us look at the technical view. The price showed increased volatility yesterday with a strong bullish rejection off the 1.28 price area which is still quite indecisive as a daily close above 1.2750. It is expected to lead to further upward pressure for Mean Reversion towards the dynamic level of 20 EMA. As the trend is bearish and impulsive with the downward pressure, a break below 1.2700 area with a daily close will lead to further continuation of the bearish pressure in the process. As the price remains below 1.30 area with a daily close, the bearish bias is expected to continue.