The British Pound fails to break below the 1.3015 level amid positive Brexit developments. Prime Minister Theresa May proposed a solution for the Irish border issue in which the entire UK nation stays united with EU customs rules for a limited time period. Additionally, Bloomberg reported that May’s team is also willing to drop out the “limited-time” requirement in order to facilitate continued talks with the EU in order to strike a Brexit deal as soon as possible. Sterling’s rise was also supported by weakness from the US Dollar. The greenback dropped on Friday following lower than expected Existing Home Sales figure from the US. Keep in mind that the disappointment in the housing figure came at a time when the US Dollar Index was attempting to break above a key resistance level. This was the third time the Dollar Index attempts to break above 96.10, hence, this raises the chance that traders might not revisit this level given the continuous failed attempts to break above it. For today, Pound traders need to focus and monitor any Brexit developments as they will be the key drivers of the pair given that no key economic data are expected to be released during the day.
The British Pound bounced off the 1.3020 support level as sentiment surrounding Brexit turns slightly positive. A continuation in the rise of the pair will be confirmed if prices break above the minor resistance at 1.3112. Keep in mind that a break above 1.3112 will also signal a break above the 50-period moving average which will mean that the pair will start to trade above all the three major moving averages. If prices start to trade above the three major moving averages then this will signal a shift in the bias of the pair which will pave the way for a rise towards the next resistance level at 1.3186.
Support: 1.3080 1.3020
Resistance: 1.3112 1.3186