The British Pound rise and fall within the same levels amid mixed Brexit signals. While talks of support to the UK PM’s Brexit proposal by the Democratic Unionist Party and the Labour rebels play positive roles to the Cable’s momentum, the EU’s lack of response and Irish criticism of the deal seems to cap the pair’s upside. In addition, the EU stands ready to extend the Brexit without the PM Johnson’s request. Moreover, the EU Chief Brexit negotiator Michel Barnier described the Tory boss’s proposal as trap while the European Commission refused any secret talks with the UK before a critical summit on October 17. Amid this confusion, traders could take directional cues today from the Composite and Services PMI data.
The Cable bounced from the 1.2210 support in an attempt to recover above the 200-day moving average for the second consecutive time, as the battle between the bulls and the bears continue. The buyers need to break above the bearish trend line to regain possession and possibly retest the 50-day moving average, 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