The British Pound remains subdued during yesterday’s session despite a better than expected CPI numbers. The uncertainty in the domestic politics remains high, as Jeremy Corbyn has urged the leaders of the other opposition parties and Tory rebels to install him as caretaker PM in order to stop a no-deal Brexit. If he wins a no-confidence vote in the government, the Labour leader plans to delay Brexit, call a snap election and campaign for another referendum. On the other hand, Boris Johnson said the EU had become less willing to compromise on a new deal with the UK, because of the opposition to leaving in Parliament. He said this increased the likelihood of the UK being "forced to leave with a no-deal" in October. Looking forward, the UK government will publish the Retail Sales data today; any slight disappointment will trigger a sell-off as uncertainty prevails.
The Sterling retested the 1.21 resistance for the third consecutive day but the bulls lack the required momentum to break through once again. Meanwhile, price has been forming support around the 1.2050 area. The bears will wait for today’s fundamental catalyst to find the necessary momentum to break below that level and retest the psychological figure 1.20. The bulls, however, need to break above 1.21 and the 50-day moving average to regain short-term control.
Support: 1.20 / 1.19
Resistance: 1.21 / 1.22