The British Pound recovered yesterday on overall USD weakness and upbeat news report signaling Brexit progress. However, the challenges to the PM May’s position are likely limiting the Cable’s upside move. Bloomberg reported that the Chairman of the national convention told PM May on Monday that more than 10% of chairmen and women of local parties had signed a petition to call an emergency meeting to vote on her departure. The UK will have no data to release today, but the US will unveil the pending home sales, consumer confidence, and Chicago PMI. However, any Brexit progress will overshadow the data and traders will turn their attention to the Brexit event to develop the required market sentiment.
The Pound recovered yesterday until it found resistance just below 1.2955 (R1) and the 50-day moving average (blue line). As long as price remains below 1.30 then the bears would stay in control, so any bounce to the upside is an opportunity to sell from higher prices. The bears will try to gather momentum again to retest and possibly break below the recent lows 1.2880 (S2).
Support: 1.2910 / 1.2880 / 1.2850
Resistance: 1.2955 / 1.2980