The British Pound extended its September recovery after PM Johnson’s multiple consecutive defeats. First the failure in calling the early election and second the failure of blocking a law that stops no-deal Brexit. However, it does not stop there. During today’s Asian session, PM Johnson again put forward a motion to call an early general election. Once again, he could not convince British lawmakers that are worried for the Tory leader’s preference for no-deal Brexit, and hence another failure, which led him to use the Queen’s support for proroguing the Parliament. In economic news, better than expected GDP and Manufacturing Production data kept the bullish momentum alive and well. Looking forward, if today UK’s employment change prints positive, then the Cable bulls will be looking to target 1.24.
The Sterling bulls broke out from the 1.2330 resistance level yesterday and reached as high as 1.2384. Currently, price is pulling back to retest 1.2330 as a possible new support. If the bulls were able to hold it, we could see another push to the upside this time retesting the 1.24 resistance level. However, any failure to hold its ground, a deeper pullback towards 1.23 or even 1.2250 could be on the cards for the British Pound.
Support: 1.2330 / 1.23
Resistance: 1.24 / 1.2450