The British Pound stabilized yesterday after UK Retail Sales data provided firm support to the Cable despite domestic political uncertainty. However, overall market support to the US Dollar limited Sterling’s upside potential. In Brexit news, around 50 members of the opposition Labour party are ready to join Tory rebels to stop no-deal Brexit. Furthermore, Jeremy Corbyn’s plan to prevent a no-deal Brexit is facing troubles from key potential allies, as he stands firm to become the interim PM in a case they win a no-confidence vote during early September. Today, if the US Building Permits data misses the forecast, it will weaken the greenback and removes the restriction on the Cable by possibly pushing the pair to the upside in the short-term.
The Sterling broke above 1.21 yesterday and pushed the price as high as 1.2150, testing the bearish trend line, which started since the beginning of August. A successful break above this trend line will push the pair higher towards 1.22. If, however, the bears will be able to protect this resistance level, a retest of 1.2050 will be on the cards.
Support: 1.20 / 1.19
Resistance: 1.2130 / 1.22