The Pound recovers back above 1.2750 following the weakening of the US Dollar. During yesterday’s trading session, US Treasury Yields dropped sharply as investors started to price in lower rate hikes from the Fed going forward. Investors believe that the several risks within the global economy will tip the Fed to take it easy in terms of hiking rates. In terms of Brexit, no significant news has arose since investors are awaiting the UK Parliament’s Brexit vote next Tuesday. For today, the pair will mainly be driven from the US Dollar’s side with investors awaiting the release of the US NFP report.
The Pound continues to trend below the 13 and 50 period moving averages indicating strong bearish momentum. A strong NFP report will strengthen the US Dollar and drive the pair into breaking below the 1.2690 support exposing the 1.2620 level. A weak NFP report will weaken the US Dollar and drive the pair back above the 13 and 50 period moving averages paving the way for a rise towards the 1.2875 resistance level.
Support: 1.2699/ 1.2620
Resistance: 1.2813 / 1.2875