GBP/USD Review: digging in at 1.2850 ahead of UK Services PMI

• Sterling spreading ahead of Wednesday's Services PMI reading.
• Brexit continues to hang as PM May's latest proposal is belly-up in the water.

The GBP/USD is sniffing around 1.2850 after a rebound on Tuesday from the pair's current floor near the 1.2800 major level, but ongoing angst over Brexit is continuing to hang over the major pair.

A brief spat of hope last week that the EU-UK negotiations might begin to gather some steam fizzled over the weekend with the EU's lead Brexit negotiator Michel Barnier torpedoing Prime Minister Theresa May's latest Brexit proposal, continuing to fire shots across the Channel through the week in an effort to try and spur the UK parliament to begin putting together an acceptable proposal to the EU. PM May continues to dodge rocks from both sides as hard0line Conservatives within her own ruling party are all too ready to sacrifice a shot at reasonable trade conditions for the UK post-Brexit in exchange for thumbing their noses at the European Union.

PM May supported Mark Carney's bid to hold his chair at the helm of the Bank of England (BoE) this week, helping to inspire a mild dose of confidence as London markets were less than enthused at the prospect of having to get comfortable with an all-new BoE governor. Carney, who was only supposed to serve fiveish years of his term at the UK's central bank will be retaining his position through the full eight years in an effort to continue steering the UK economy through current waters.

On the economic calendar for the UK today we have the Markit Services PMI for August dropping at 08:30 GMT, expected to tick upwards slightly to 53.9 for August after printing at 53.5 in July, but a missed reading here could constitute a shot across the bow for Pound bulls and send the GBP/USD lower for the midweek.

GBP/USD Technical Analysis

Tuesday's bullish correction is running the risk of tipping over as it runs out of steam heading into Wednesday, and the challenge for buyers will be to keep the GBP/USD propped up as they hold on for a positive PMI reading today. Failure to stick above 1.2800 will see the pair falling back into 2018's lows, while a successful rebound will see the major pair primed for a further leg up off of a higher low from 1.2810.

GBP/USD Chart, 15-Minute