The Pound faced a sell-off yesterday after Brexit hardliner Boris Johnson led the race to become the next UK PM, increasing the odds of a no deal Brexit, as the ex-Foreign Minister has already stated that he would exit the EU on October 31st, with or without a deal. On the other hand, recent industrial production and GDP data from the UK added more pressure on the Cable after missing market expectations, which may also push the BoE policymakers to alter their recent upbeat tone. Today, the UK will be releasing Average Earnings Index, Claimant Count Change and the Unemployment rate, with the recent political pessimism dragging the British Pound downward, the bulls need to see upbeat numbers to save the Sterling from falling back to the recent lows.
The Cable fell below 1.27 yesterday but saved by the 50-day moving average, as the bullish momentum started to fade. The bulls need to keep price above 1.2650 to stay in control and possibly retest 1.2750, or else the bears will take over and fade the Sterling back towards the recent lows 1.26 and 1.2560.
Support: 1.2650 / 1.2615
Resistance: 1.27 / 1.2750