The Pound ends yesterday’s trading day unchanged as Brexit fears hindered the bull rally following the better than expected U.K inflation data. During the London trading session, the Pound was able to rise all the way towards the 1.32110 mark as the CPI figure printed at 2.7% compared to the expected 2.4%. This inflation data surprise raised chances of a sooner than planned British interest rate hike which tempted investors to propel the Pound higher. Sadly, this rally did not hold as “no-deal” Brexit fears returned to the market following a report from the Times. The report suggested that Prime Minister Theresa May is set to reject the EU’s new proposal regarding the Irish border. For today, investors need to monitor any significant Brexit comments from EU leaders during the second day of the summit in Austria. Additionally, investors need to keep an eye on the Retail Sales figures release from the U.K as they will give a clearer understanding on whether interest rates should rise or not.
The Pound clearly rejected the 1.32000 level however, a retesting of the same level is possible since the pair remains to trend above the 13-period moving average. Depending on any announcement related to Brexit and the U.K Retail Sales figures, the pair will either rise back up towards 1.32000 or drop down towards 1.30919.
Support: 1.30919 1.30389
Resistance: 1.32000 1.32500