The Pound rises for the third day in a row as the US Dollar weakens and expectations for a finalized Brexit deal increase. The US Dollar lost momentum following the results of the US midterm elections which yielded an outcome of a divided Congress. The Republican party was able to maintain control of the Senate but failed to maintains its control of the House. A divided Congress will mean that it will be more difficult for President Trump to implement his economic friendly policies which means that inflationary pressures will ease. Expectations of easing inflationary pressure was seen by a drop in US Treasury yields which also explains the drop in the US Dollar. The Pound’s rally is also supported by growing prospects of a finalized Brexit deal by the end of this month with the whole UK set to remain in the EU’s customs and no hard border will exist in the Irish island.
The Pound continued its rally higher by reaching the 1.3110 resistance level following the earlier break of the 1.2990 resistance level. Momentum is clearly bullish with prices trending above all the three major moving averages The next leg up will be confirmed after a break of the 1.3152 resistance which will pave the way for a rise towards 1.3230.
Support: 1.2990 / 1.2925
Resistance: 1.3152 / 1.3230