GBP/USD Forecast: Sterling Targets Major Support At 1.3000 After Breaking 200-DMA

• The GBP/USD is trading little changed on the downside around 1.3020 as the currency pair is trapped in a corrective mode lower amid Brexit uncertainty.
• The UK junior coalition DUP leader Foster said she raised opposition to the backstop repeatedly with Prime Minister Theresa May.
• The UK services PMI fell to 50.1 in January as Brexit uncertainty continuously weighs on the economic activity.

The GBP/USD is trading little changed on the downside at around 1.3020 on Tuesday amid ongoing Brexit uncertainties and another blow to prospects for the Brexit deal to pass the British parliament with the junior coalition DUP party leader claiming numerous calls on Irish border backstop with Theresa May.

The DUP leader Foster said she raised opposition to the backstop repeatedly with Prime Minister Theresa May with her party opposing the current setup for the Irish border. The Irish border backstop is the hottest issue of the Brexit deal with the UK lawmakers opposing the current setup while the European Union refuses to give up on the claims. The opposing views from the UK and the European Union are still unresolved even with only 52 days left before the UK leaves the Union on March 29.

Meanwhile, the economic fundamentals are reflecting the Brexit uncertainty in a lower reading for the measures of the economic activity. The UK manufacturing PMI rose less than expected to reach 52.8 in January and construction PMI dropped to 50.6 in January from 52.8 in December as Brexit uncertainty weighs on the economic activity.

The services PMI also fell below the expectation standing at 50.1 in January, just above the 50 mark dividing the economic expansion and contraction amid general Brexit negotiations stalemate.

Technically the GBP/USD is moving within a sideways trend after breaking the downward sloping long-term trend on the upside. The GBP/USD is currently trading just below 200-day moving average (DMA) of 1.3030 and while it is capped below 1.3100, the 200-DMA is likely to be the immediate target on the downside.

The technical oscillators like the Relative Strength Index (RSI) and Slow Stochastics (SS) are both pointing lower with Slow Stochastics making a bearish crossover in the Overbought territory indicating future price declines.

GBP/USD daily chart