GBP/USD heads into the new week trading south of 1.2600

• A new week sees little data early on for the GBP and plenty of Brexit headlines to gum up the wheels for bullish hopefuls.
• PM May's newest challenge will be to face down growing calls for a second Brexit referendum.

GBP/USD heads into the new trading week on the wrong end of 1.2600, trading into recent lows as Brexit continues to hang off of the Pound, dragging the GBP into the downside as cracks continue to widen as the UK barrels into a messy Brexit showdown in March.

PM May attacks second Brexit referendum proposal

UK Prime Minister Theresa May finds herself back at square one after a couple of weeks of intense distractions, surviving a no-confidence vote from within her own Tory party last week following the PM's last-minute decision to pull her largely-despised Brexit withdrawal proposal from a parliamentary vote the week before as the divorce deal looks all but guaranteed to die on the floor of the UK's House of Commons. With the EU warning in no uncertain terms that there will be no further negotiations for concessions or further discussions in general surrounding Brexit, all that PM May has left to do is let her current proposal face a parliamentary vote, but Mrs. May's camp is looking to wind down the clock on Brexit further in hopes to corral further support from the UK's parliament, hoping that a lack of time before next March's deadline will see the UK's naysayers more agreeable.

The economic calendar is free and clear of UK data for Monday, and with little meaningful data to come from Monday's US market session, investors will be facing a fresh blast of Brexit headlines for the new week, although Europe's CPI reading early today could see broader markets take a turn for the risk-averse if inflation measures confirm traders' fears about an economic slowdown coming in for a landing on the European continent.

GBP/USD levels to watch

As noted by FXStreet's own Valeria Bednarik, action towards the low end continues to mark out shorting opportunities on the GBP/USD pairing: 

The GBP/USD pair bottomed at 1.2479 last week, its lowest since April 2017, bouncing up to 1.2686 after PM May survived to the no-confidence vote, resuming its decline afterward. The mentioned high was way below the weekly one at 1.2759, indicating that market players still see recoveries as an opportunity to sell. According to the daily chart, the bearish trend is set to continue, as the pair is developing well below its 20 DMA, which extends its slump below the 200 EMA, while technical indicators resumed their declines within negative levels after a modest bounce from nearly oversold readings. In the 4 hours chart, the price settled below a directionless 20 SMA, while technical indicators hold within bearish ground, the Momentum heading lower and the RSI hovering around 45, all of which maintains the risk skewed to the downside.

Support levels: 1.2545 1.2510 1.2475
Resistance levels: 1.2620 1.2665 1.2700