The Pound fell yesterday as Brexit uncertainty prevailed after the opposition Labour party leader Jeremy Corbyn backed second referendum. Moreover, the quarterly results of the Confederation of British Industry (CBI) showed poor numbers for the service sector companies in the UK, adding more pressure on the Sterling. The market sentiment was also dented by the US and China continuous war of words as the global barometer of risk sentiment, the US 10-year treasury yield, slipped further below October 2017 lows. Today, the light macroeconomic calendar will allow traders to look for a fresh catalyst from either Brexit or the US-China trade dispute.
The Pound touched the 1.27 resistance level yesterday and fell as expected but the bulls manage to find support at 1.2650 and form a base just above it. With enough momentum, the buyers could challenge the 1.27 level, which is also the 50-day moving average, and potentially break above it. The bears however, need to break below 1.2650 to regain full control and push the Cable lower towards the recent lows 1.26.
Support: 1.2650 / 1.26
Resistance: 1.27 / 1.2750