The British Pound surged yesterday despite mixed data and political pessimism at the UK. Lower than expected prints of the Manufacturing and Industrial Production caused the Sterling to drop in yesterday’s early session. However, the down-tick couldn’t last long after the Testimony from the US central bank Chairman and minutes of the latest meeting removed any recent optimism surrounding the US Federal Reserve’s future monetary policy moves, mainly driven by upbeat employment data from the US. Despite this recent bullish move on the Cable, market sentiment remains bearish in the big picture as no-deal Brexit is slowly becoming a reality.
The Cable broke above the major psychological level 1.25 after it found support at 1.2440. Currently, the Sterling is sitting just below 1.2540 resistance level, if the bears find momentum they could revisit 1.2506 and possibly break below it once more. The bulls, on the other hand, still have a long way to go before regaining control. However, in the short-term, they need to take out 1.2540 to open doors for a possible 1.2585 retest.
Support: 1.2506 / 1.2440
Resistance: 1.2540 / 1.2585