With the absence of any Brexit-positive headlines, the British Pound continued to rollover during yesterday’s session. The UK is still far from pleasing the EU leaders, after the bloc’s chief negotiator calls PM Johnson’s Irish backstop solution “unacceptable”. Additionally, the recent Brexit discussions between European Commission President Jean Claude Juncker and the UK PM Boris Johnson, at the United Nations General Assembly, failed to deliver any breakthrough. The Cable sellers were also pleased to know the Opposition Labour party leader Jeremy Corbyn’s victory at the party’s annual conference. Mr. Corbyn recently risked his position by proposing a motion that will not oppose the Brexit. As a result, the sentiment favors the bears in today’s session as the sellers are looking to break below the crucial support level, 1.24.
The Cable sellers pushed price below the 50-day moving average in an attempt to dent the market sentiment even further. The bears’ next target will be to break below the rising trend line, which started since the beginning of September. If successful, then the bulls will likely lose control and we will start looking for further weakness in the Sterling moving forward. The buyers need to break back above 1.2440 and the 50-day moving average to regain possession.
Support: 1.24 / 1.2365
Resistance: 1.2440 / 1.25