GBP/USD: Brexit on the backburner once more as UK Inflation Hearings back for another round

• Brexit tensions remain high, but volatility has tightened up as investors await the next turn of the page.
• The UK's latest Inflation Hearings sees the BoE's Carney on the testimony stand today in parliament.

GBP/USD is trading flatly near 1.2850, keeping tied to familiar levels for the week as Sterling traders enjoy a breather from a hectic circuit of buying on hopeful Brexit headlines, and then selling short on suddenly bearish Brexit headlines.

Brexit remains a hot mess for the Sterling, and Prime Minister Theresa May is in a race against the clock as she tries to strong-arm a 500-page Brexit 'deal' as Brexiteers within her own Tory party increasingly call for a no-confidence vote in PM May's office, and the risks remain high that regardless of May's efforts, her own House of Commons may outright reject the current Brexit offering anyway, which could throw a major wrench in the works. Before that, though, Pound traders must first get through the upcoming EU Brexit Summit, where support is expected to be broadly received for the current Brexit plan.

On the economic calendar for Tuesday, the Bank of England's (BoE) Governor Mark Carney will be delivering his testimony in the British parliament for the latest Inflation Report Hearings, and Carney's words could see far-reaching effects today if the UK's central bank maintains a too-dovish stance while investors take a quick break from the Brexit rollercoaster.

GBP/USD Levels to watch

The Cable is enjoying a reprieve from constant trips around the block on Brexit headlines, but as FXStreet's Chief Analyst Valeria Bednarik noted, that may not last for long: "the pair has stabilized but this quietness could be a temporal illusion, given Brexit-related governmental chaos. The pair traded as high as 1.2883, where the pair has the 61.8% retracement of the 2016/18 rally a level that had probed strong in the past. The upward potential is limited also in the short term, as, in the 4 hours chart, the pair has been unable to settle beyond a strongly bearish 20 SMA which continues moving away from the 200 EMA. The Momentum indicator in the mentioned chart aims higher in neutral territory, but the RSI remains flat around 46, offsetting the potential of the first."

Support levels: 1.2810 1.2765 1.2725

Resistance levels: 1.2845 1.2890 1.2530