The British Pound closed positively despite losing most of its daily gain as the US Dollar gained some ground after an upbeat CPI data. The Fed Chair however, remains pessimistic about the future inflation expectations and favor a 25 basis points rate cut. In terms of politics, policymakers kept making the UK Prime Minister (PM) candidate Boris Johnson responsible for recent resignation by the UK’s ambassador to the US. Additionally, BOE Governor Carney, in his yesterday’s speech, continued to highlight the risk of no-deal Brexit, but couldn’t drag the Cable down. Looking forward, speech from the BOE’s Vlieghe will be the main focus for today amid lack of major data from the UK. Whereas PPI numbers from the US and speech by the FED Evans could keep traders entertained in the after-noon.
The Cable attempted to break above the 50-day moving average yesterday but got rejected and rolled over back towards 1.2510s. Currently, the bulls are retrying to push the price above that line to retest yesterday’s high, 1.2570. If that level is successfully taken out, then 1.26 will be a likely scenario for the buyers. On the other hand, if 1.2570 is rejected again today, then a pullback towards 1.25 and possibly further will be expected.
Support: 1.2506 / 1.2440
Resistance: 1.2570 / 1.26