The British Pound surged to a fresh multi-week high of 1.2526, helped by the diminishing dollar’s demand and comments from ECB’s Villeroy saying that he still hopes that a Brexit deal can be reached, although adding that the EU must be ready for a no-deal. Additionally, the UK Supreme Court began a three-day hearing over PM Johnson’s decision to prorogue the Parliament. Meanwhile, comments from EU authorities continue to reflect the ongoing uncertainty; "France is still waiting for Britain to send precise propositions on Brexit," an official from French President Macron stated. In terms of macroeconomics, the UK will release August CPI and PPI data, but the main event is undoubtedly the Fed’s monetary policy decision where the market expects a 25bps rate cut. If that occurs, then the recent bullish sentiment on this pair will likely continue pushing the Cable higher.
The Cable bulls attempted to break above 1.25 during yesterday’s session but lacked momentum to continue their endeavor after bouncing from 1.24 to 1.25. Today, if the bullish sentiment remains the same, we will likely see a break above 1.25, taking price towards 1.2550 and possibly even 1.26. On the other side, the bears will be trying to protect this level of resistance and push the Sterling back towards 1.24.
Support: 1.24 / 1.2370
Resistance: 1.25 / 1.2550