The Pound posted the third back to back loss yesterday as chances of hard Brexit continued to threaten the Sterling optimists. The UK’s Foreign Secretary Jeremy Hunt was the latest to support changed or no backstop in the new Brexit deal that will be up for discussion during next week. On the other hand, the opposition party leader Corbyn was firm on his party’s support to call for a referendum on any Brexit deal to be up next week without any delay. Traders will have the US GDP data today to focus on for a change in this uncertain environment, while keeping an eye on the wires as Brexit headlines are surely here to stay for a bit longer.
The Cable broke below 1.2650 yesterday and found support just above the recent lows 1.2604. Price action looks weak and the sentiment remains bearish so any negative fundamental catalyst could lead price to break below 1.26 and head towards 1.2550 for a retest. However, if the bulls manage to get back above 1.2650, the Sterling will likely see further short-term strength towards 1.27 and the 50-day moving average.
Support: 1.2604 / 1.25.50
Resistance: 1.26.50 / 1.27