The US Dollar extended its losses from the two-year top after the dismal ISM Non-Manufacturing PMI data. With this, the British Pound shrugged off early-day headlines suggesting the EU has given one week’s time to PM Boris Johnson to present a better deal. On the other hand, the Tory leader is likely to gain support of 30 Labour rebels that can help his Brexit deal pass through the UK’s House of Commons. Looking forward, traders will be more concerned with the September NFP, Unemployment Rate and Average Hourly Earnings. Any negative data will likely push the Cable higher.
The Cable broke above the bearish trend line, the 200 and the 50-day moving averages, shifting the market sentiment back to the bulls’ side. The buyers are gathering momentum around the 50-day moving average, just above the 1.2330 support level, in an attempt to retest yesterday’s highs. The bears need to break back below the 200-day moving average to regain possession.
Support: 1.2330 / 1.2272
Resistance: 1.2380 / 1.2412