The British Pound recovered and peaked at 1.2260 yesterday after UK PM Boris Johnson was defeated in Parliament. MPs are working against the clock to prevent a no-deal Brexit, while PM Johnson threatened to call for a general election on October 15 if Parliament succeeds in blocking his plans. Opposition leader, Jeremy Corbyn, stated that he would not back Johnson election’s plan unless a no-deal Brexit is averted. Meanwhile, BOE’s Governor Mark Carney testified before the Treasury Committee as part of the central bank’s inflation report hearings. Among other things, he said that "if you look through underlying trend, our judgment is that economy is growing very weakly, close to zero," and that the central bank won’t intervene the market to control Pound swings. In economic news, the UK Markit Services PMI for August came in worse than expectations, which was quickly dismissed as market participants are focused on Brexit woes. The bullish momentum will likely continue in today’s session if any major negative headline regarding Brexit will not interfere with the sentiment.
The Sterling gave a green light for the bulls after it broke above the 50, 200-day moving averages and the medium-term bearish trend line. The bullish momentum will likely stay alive in today’s session as long as price holds above 1.22. A break above 1.2250 will probably extend yesterday’s gains towards 1.23. However, a break below 1.22, the bears will likely regain control and push the Cable lower.
Support: 1.22 / 1.2170
Resistance: 1.2250 / 1.23