The British Pound fell below 1.26 yesterday after June Construction PMI plunged much more than expectations as Brexit uncertainty continues to hit the economy in every sector. In addition to that, dovish comments from the BOE Governor Carney kept pressure on the Sterling, he also warned global trade war could ‘shipwreck’ global economy, citing that trade protectionism is the key negative for the markets. With the lack of any Brexit headline, the Cable’s decline will likely continue today if UK’s Services PMI shows any weakness.
The Sterling broke below 1.26 yesterday, currently heading towards 1.2560 for a retest. If the bears manage to break below that level, we could likely see price revisiting the recent lows, 1.2507. The bulls will need to break back above 1.26 to stop, or at least pause, this current bearish momentum.
Support: 1.2560 / 1.2507
Resistance: 1.26 / 1.2660