The Pound's rally cools off as the U.S Dollar gains following a surge in demand for safe haven currencies. On Friday, investors sold off their high beta currency positions and bought into the U.S Dollar due to an escalation in trade tensions between the U.S and China. President Trump first wrote on Twitter that the U.S is “under no pressure” to make a trade deal with China. This was followed by a Bloomberg report which stated that President Trump is planning to proceed with his additionally proposed $200 billion tariffs on China indicating that tensions between the two nations remain.
Even after the retracement downwards, the pair remains to trade above the 1.30824 support level. Depending on what develops between the U.S and China, the pair will either continue its medium term rally upwards or drop back down towards the 200-period moving average. A break above 1.30919 will pave the way for a rally all the way towards 1.32000, and a break below 1.30389 will pave the way for a drop towards 1.29608 which coincides with the 200-period moving average.
Support: 1.30389 1.29608
Resistance: 1.30919 1.32000