The Pound recovered over 100 pips yesterday after a better UK Manufacturing PMI and a weakening US Dollar across the board, but the Cable bulls quickly lost momentum as Brexit headlines kept the market sentiment in a bearish state. PM Johnson is in for another attempt to prorogue the British Parliament and likely delay in budget announcements. Adding to the downside pressure could be the negative reaction of the EU and Irish diplomats after PM Johnson said that the Irish customs checks would be a reality after Brexit. Today, if the UK Construction PMI disappoints the market, the Sterling will likely fall once again to retest yesterday lows.
The Cable bounced from the 1.2210 support in an attempt to recover above the 200-day moving average, but the bulls quickly lost momentum as price reversed after it touched the downtrend line, 1.2340. The buyers need to break above the bearish trend line to regain possession, or else the sellers will stay in control, pushing the Sterling towards 1.2210, and possibly lower.
Support: 1.2272 / 1.2210
Resistance: 1.2345 / 1.2380