The British Pound was sold off on Friday after concerns regarding the Irish backstop reemerged as the EU-UK Brexit negotiators are still in a fall out as far as this issue is concerned. Although, both side will still debate the topic for some more time before heading to this week’s United Nations’ conference. Elsewhere, the opposition Labour party leader Jeremy Corbyn recently surprised fellow politicians by saying that the UK will be better off the EU. Furthermore, the case against the UK PM’s parliament prorogation will be discussed in the Supreme Court with a final hearing likely to roll out tomorrow. On the positive side, earlier today Boris Johnson and President Trump agreed to strike a UK-US trade deal by July 2020. However, the market sentiment remains dented since Friday and today’s lack of macroeconomic data will likely lead traders to remain bearish on the Cable until further Brexit development.
The Cable peaked out at 1.2583 and reversed on Friday, as the sellers were able to break below the rising trend line, which tilted the market sentiment to the bears’ side. The sellers are currently targeting the 1.24 support level, as it is also another bullish trend line dating back since September 5. A break of that level will further dent the market sentiment. However, the bulls still have a couple of chances to regain possession by first protecting the 50-day moving average and second the rising trend line at 1.24.
Support: 1.2440 / 1.24
Resistance: 1.25 / 1.2550