The Pound recovered its intraday losses and closed just below 1.3150 after bottoming for the day at 1.3012. The Sterling came under selling pressure yesterday, after the release of the weaker than expected UK Markit Construction PMI. However, Brexit headlines saved the day as PM May made a statement saying that a further extension is needed, aiming to leave the EU by May 22nd. She added that she is 'taking action to break the logjam,' and wants Corbyn to agree with her withdrawal agreement and on changes to the future relationship, offering a cross-party approach. Meanwhile, MPs are focused on preventing a hard-Brexit, and will likely meet this week for another round of indicative votes. The UK will release the Markit Services PMI for March but will likely be overshadowed by any Brexit headline.
The Pound broke above 1.31 yesterday and currently retesting 1.3150 (R2) where the 50 and 200-day moving averages are crossing over. A break above this resistance area could take price higher towards 1.32 (R2). On the other hand, if the bulls lose momentum, then the Sterling will likely pullback to 1.31 (S1).
Support: 1.31 / 1.3050
Resistance: 1.3150 / 1.32