The Pound remains to trade around the 1.2800 level after last week’s deep sell off. The British currency heavily sold off last week as risks of a “no deal” Brexit grew and pushed investors away from the currency. Even Brexit Secretary Dominic Raab pointed out this possibility by stating to the media that “there is a risk of a “no deal” Brexit due to the EU’s stern negotiating stance”. For today, the focus will remain on any developments related to the Brexit negotiations between the UK and the EU. However, the pair might also be driven by movement from the US Dollar since the US PCE Deflator is set to be released.
The bias on the Pound remains bearish as EU and British politicians fail to deliver any significant sign of a positive Brexit outcome. The pair is clearly trending below the 13-period moving average and constantly rejecting this moving average whenever prices rise towards it. The constant rejection of the moving average is a sign of strong bearish momentum. The next leg down on the Pound will be trigger by the break below the 1.2792 which will expose the next support level at 1.2730.
Support: 1.2792 1.2730
Resistance: 1.2840 1.2921