The Pound falls back down towards the 1.2770 mark after Prime Minister Theresa May announced that she will not rule out the “no deal” Brexit outcome if the House of Commons votes down on her current proposed deal with the EU. Although a “no deal” Brexit have not been confirmed yet but considering it as an option alone scares investors away from the British currency. For today, the focus will remain on any news announcements related to Brexit and the Sterling is also expected to move based on investor sentiment around the outcome of the Brexit deal vote. Additionally, investors need to also keep an eye on the G20 summit as any improvement in trade relations between two major countries will drive investors towards high beta currencies such as the Pound.
The Pound rejects the 13-period moving average indicating that momentum remain bearish. Prices are now trading below all three major moving averages which means that the current directional bias for the pair is bearish. From this point, the next support ahead is at 1.2727 which means that a reversal from the current price point is unlikely from a technical standpoint.
Support: 1.2727/ 1.2650
Resistance: 1.2797 / 1.2855