‘UK will be the greatest place on Earth after Brexit’ says the new PM Boris Johnson. The British Pound surged on the PM’s words but quickly rejected after the market realized the risk of a possible no-deal Brexit. Moreover, Mr Johnson being in favor of no Irish back-stop, also continues to keep the pressure intact around the Cable. The risks are rising as the Brexit deadline approaches, keeping the outlook for the Sterling volatile with a bearish bias. Attention now turns towards the critical US GDP numbers for the Q2 that is likely to influence the Fed’s course of action regarding the upcoming rate cuts, while the markets look forward to fresh Brexit related developments. A Stronger Dollar will most likely help with the current bearish narrative on the British Pound.
The Pound bulls attempted to break above the 1.25 trend line resistance for the second consecutive day, but the buyers were quickly rejected by the sellers on the other side of the trade and pushed the Sterling lower. The bears will remain in control targeting next 1.2382 and 1.2350 as long as price trades below 1.25. The bulls need to break above this current short-term bearish trend line in an attempt to reverse the trend.
Support: 1.2420 / 1.2382 / 1.2350
Resistance: 1.2455 / 1.25 / 1.2555