The Sterling dropped significantly during yesterday’s session as no progress has been made from the cross-party Brexit talks which dented the sentiment around the Pound. The pair however managed to find support at the two-week lows of 1.2943 in early Asia after US President Trump lifted the pressure on the risk currencies by being optimistic about future trade negotiations. However, the bounce remains limited by the ongoing uncertainty around the Brexit issue. Today, traders will focus on UK’s macroeconomic calendar, as Britain will release its Average Earnings index, Claimant Count Change and the Unemployment Rate. Better than expected results could boost the Pound higher.
The Pound broke below key support levels yesterday, the 1.30 psychological round number being one of them. The 50 and 200-day moving averages are crossing over, signaling a possible bearish continuation. A break below 1.2943 could confirm more weakness on the Cable, possibly heading towards 1.2915 (S2) and 1.2880 (S3). However, the bulls need to find momentum and break above 1.2970 (R1) to boost the market sentiment and take the Sterling higher to retest the 1.30 key level.
Support: 1.2943 / 1.2915 / 1.2880
Resistance: 1.2970 / 1.30 / 1.3025