The Sterling crashed below important support levels as the political limbo keeps the pressure on the British currency. While the odds of a no-deal Brexit at the October 31st deadline appear to have diminished, expectations are building that a snap election will be the only way to potentially break the currency deadlock. However, that in itself adds further uncertainty over UK politics and thus the pressure will remain on the Pound, especially with the fact that Boris Johnson is left with just 5 days to deliver an Irish backstop alternative. Today, BoE Governor Carney will be giving a speech regarding the monetary policy; a slight dovish tone from the Governor could push the Cable much lower.
The Cable bulls lost the September rising uptrend as the bears are now back in control, looking to extend the drop further towards 1.23 and the 200-day moving average. A retest of the recently broken trend line (1.2415) is likely before resuming the bearish momentum. The bulls, on the other hand, need to break back above the trend line and the 50-day moving average to regain possession.
Support: 1.2340 / 1.2290
Resistance: 1.2380 / 1.2415