The Cable declined temporarily following the Fed’s hawkish rate cut, adding to the weaker than anticipated British CPI numbers. However, recent news suggests the EU’s push for a clear plan concerning the Northern Ireland border after the Brexit. Though, no-deal worries conveyed by German Finance Minister and the Democratic Unionist Party leader Arlene Foster’s shift in support increases the odds of a deal between the EU and the UK in near future. As a result, the sentiment surrounding the Pound remains bullish as long as today’s UK Retail Sales doesn’t disappoint and BOE meeting minutes won’t sound dovish.
The Cable bulls remain in control as they have attempted to break above 1.25 resistance level for the second consecutive day. The buyers will have the advantage to break to new multi-month highs and retest 1.2550, as long as price remains above 1.2450. The bears on the other hand, will attempt to pierce through the 1.2450 support for a possible deeper pullback towards 1.24.
Support: 1.2450 / 1.24
Resistance: 1.25 / 1.2550