The Pound lost its ground on Friday as PM Johnson kept the political drama alive in the UK. After having received approval from the House of Lords, the bill to stop no-deal Brexit for 3 months to October will reach the Queen for being the law. However, PM Boris Johnson has threatened to re-call a vote in the House of Commons concerning a snap election. Furthermore, Mr. Johnson will travel to Dublin today in order to convince the Taoiseach Leo Varadkar about Irish backstop. Latest talks between the UK and the Irish policymakers have been positive after the PM suggested single regulatory regime north and south of the border for food and agriculture, although the decision is not final yet. Today, the Cable retraces ahead of the key GDP and Manufacturing Production data scheduled for publishing. Any disappointment in those numbers will likely push the Sterling towards 1.22. However, a better than expected data will push the bulls to gather momentum and retest the recent high 1.2350.
The Sterling bulls faced a wall at the 1.2350 resistance level, and now we are seeing price slowly retracing back below 1.23. A retest of the recently broke trend line is expected, which is around 1.22, that is where the bulls will likely show up to regather momentum and push price higher. However, if the Pound breaks below 1.22 and 1.2170, then the bears will take back complete control and start targeting the yearly lows.
Support: 1.2211 / 1.2170
Resistance: 1.23 / 1.2350