The Pound rallies higher as Theresa May and the EU reach significant progress in regards to Brexit. A spokesman from the European Commission appeared in front of media outlets yesterday and preached that “very good progress had been made” during yesterday’s meeting between Theresa May and the President of the European Commission Jean-Claude Juncker. Note that the finalized terms of the deal are expected to be presented during Sunday’s EU summit catered specifically to Brexit. However, even if the proposed terms gain the approval of EU leaders, such deal will still have to be approved by the UK parliament. Keep in mind that many members of the UK parliament have been showing discontent with what they have heard so far about the proposed terms of the deal. For today, the focus will remain on Brexit developments as this topic remains the evident key driver of the pair and no economic figures from the UK or the US are to be released today.
The Pound breaks above the 1.2892 level following the positive Brexit development. Such break above the resistance level exposes the next key resistance level around the 200-period moving average at the 1.2937 price point. Bear in mind that the continuation in the rise will only occur if sentiment surrounding Brexit remains positive. Additionally, the break below the 1.2805 support will cancel the scenario mentioned earlier and will lead to a drop towards 1.2729.
Support: 1.2805/ 1.2729
Resistance: 1.2892 / 1.2937