The British Pound surged around 200 pips yesterday reaching just below 1.30 after the UK and EU agreed on a Brexit withdrawal. In tomorrow’s sitting, the parliament will vote on approving the new Brexit deal. However, getting the deal approved is going to be a very hard task for Prime Minister Johnson, as the Democratic Unionist Party – government's Northern Irish ally - has rejected the deal. Traders, therefore, may unwind GBP long positions ahead of tomorrow’s meeting, keeping the pair under pressure. Additionally, BoE Gov. Carney will be updating the latest monetary policy decisions and the state of the economy, nonetheless, traders’ focus will remain on the Brexit saga.
The Cable bears keep being squeezed-out as price reached just below 1.30 during yesterday’s session. However, the sellers were able to keep the Pound below the 1.2885 resistance level for now. The market structure still favors the bulls in the short-term as long as price remains above 1.2785. Any break below that level, will likely trigger further sell-off towards 1.27. However, a break above 1.2885, the bulls will likely extend their gains by attempting to test the 1.30 key psychological resistance.
Support: 1.2785/ 1.2710
Resistance: 1.2885 / 1.2991