The Pound recovered on Friday as trade tensions and sluggish US data were taking a toll on the greenback, growing doubts on the US economic strength recently favored the Dollar bears. In addition to Barclay’s forecast of two rate-cuts from the US Fed, Goldman Sachs’ another downward revision to the US economic growth could also reinforce the Fed to turn dovish during the June meeting. However, the overall bearish sentiment on the Sterling is still intact, as the uncertainty around the Brexit meeting on June 7 could overcome this recent bearish sentiment on the greenback. But for now, traders will focus on today’s US and British PMI data while President Trump’s 3-day visit to London will also grab market attention.
The Cable bulls pushed price towards 1.2650 resistance level, which is also the 50-day moving average. But the bears rejected price as the overall sentiment remains with the sellers, as a result the Sterling is probably retreating towards 1.26. If momentum picks up, we could see a retest of the Friday’s low 1.2558. However, if the buyers were able to break above 1.2650, then we could likely see a push towards 1.27.
Support: 1.2604 / 1.2558
Resistance: 1.2650 / 1.27