GBP/USD bounces to 1.2950, but upside limited as traders await Friday's UK GDP

• Sterling catches some lift in Asia as the US Dollar takes a step back, but downside pressure remains.
• Brexit and a hesitant BoE continue to tie down the Pound as UK GDP numbers approach on Friday.

The GBP/USD is trading into 1.2950 ahead of Wednesday's London markets, catching some lift in the early Asia session. 

Brexit concerns continue to weigh on the Pound as traders await negotiations between the UK and the European Union to begin again in the coming weeks.

Inflation expectations and hopes for interest rate hikes from the Bank of England (BoE) are also dragging on the Sterling, with the BoE's McCafferty reaffirming BoE Governor Carney's call that rate hikes will be small and slow for several years, a pace of increases that will be much lower than many GBP traders were initially hoping for.

The economic calendar for this week remains thin, with only low-tier data on the offering for Wednesday, and GBP traders will be turning their eyes to the UK's GDP reading due on Friday.

GBP/USD levels to watch

Bearish pressure hangs over the GBP/USD, and as FXStreet's own Valeria Bednarik noted, "the short-term picture continues favoring the downside, as the pair remained near its yearly low, while an intraday advance stalled at 1.2972, well below the 1.3000 figure. In the 4 hours chart, technical readings favor a new leg lower, as the 20 SMA maintains a strong downward slope above the current level, while technical indicators resumed their declines after correcting extreme oversold conditions. The main support continues being the 1.2920 level, the low set this week, with a downward acceleration expected on a break below it."

Support levels: 1.2920 1.2885 1.2840                                                                                       

Resistance levels: 1.2965 1.3000 1.3045