The Pound drops towards the lower end of the 1.2700 support level as risk sentiment drive investors away from risky currencies. In addition to the fears regarding the Brexit turmoil in the UK, the Pound is also being pressured by negative investor sentiment in the market. Sentiment is negative due to fears that the US and China won't be able to reach a trade deal, and due to the risk of a possible recession in the US after the US treasury yield curve began to invert. For today, the Pound will continue to be driven by sentiment surrounding Brexit, the trade negotiations between the US and China, and the condition of the US economy. Additionally, Pound investors need to monitor both the UK and the US Services PMI figures as their results might play a part in driving the pair for the day.
The Pound continues to drop lower after trending below the 13 and 50 moving averages. As long as prices continue to trend below the two moving averages, the directional bias of the pair will remain bearish. The next leg downwards will be triggered after a break of the 1.2671 support paving the way for a drop towards the 1.2620 support level.
Support: 1.2671/ 1.2620
Resistance: 1.2829 / 1.2875