The Pound bounces off the 1.2725 support as most of the major currencies benefit from the sharp drop in the US Dollar. Alongside other currencies, the Pound was able to rise following Fed Powell’s unexpected dovish remarks during his speech yesterday in New York. Powell unexpectedly suggested that interest rates are currently “just below” the desired neutral rate, which is a major shift from this month’s earlier comment in which he mentioned that rates are “a long way” from neutral. For today, investors will continue to digest Powell’s unanticipated rhetoric and they will also monitor any updates related to Brexit which will play a part in the currency pair’s movement from the Pound’s side.
The Pound bounced off a key support level and rises above both the 13 and 50-period moving averages. Prices are currently ranging around the 1.2840 resistance level and the next leg up will only be confirmed if prices break above 1.2855 which will then pave the way for a rise towards 1.2910. Inversely, a rejection of the resistance level will mean that the pair will return back downwards but that will only be confirmed if prices dropped back below the 13 and 50-period moving averages.
Support: 1.2797/ 1.2727
Resistance: 1.2855 / 1.2910