Despite Brexit updates has been light due to the Easter recess in the UK parliament, the Pound was sold off during yesterday’s session amid chatters of slow progress in the cross-party talks and members of the parliaments to get a vote over the EU customs union pact. Traders are starting to lose their patience, and market sentiment is shifting towards negative as Brexit uncertainty prolongs. On the economic side, higher than expected claimant count change and soft average earnings from the UK added more downside pressure on the Sterling. Today, traders will focus on UK’s March Consumer Prices Index (CPI) and later on BoE’s Carney, who will be giving updates about the economy and the monetary policy.
The Pound broke and closed below an important up trend which started since the beginning of April (blue trend line), shifting the market sentiment to the bear’s side. The Sterling is currently retesting the broken previous support, if the bulls fail to break back above it, then price will weaken and rollover towards 1.30, a major psychological support. However, if the buyers will be able to take price back above 1.3075, then the market will be back to square one.
Support: 1.3020 / 1.30
Resistance: 1.3070 / 1.31