The Sterling was boosted yesterday after the UK Supreme Court rules Boris Johnson’s suspension of Parliament unlawful, which gave the UK lawmakers up to two weeks of extra time to continue with their work to block no-deal Brexit on October 31. The pair rallied back to the key 1.25 psychological mark and got an additional boost from a modest intraday US Dollar pullback, further fueled by the disappointing release of the CB’s US Consumer Confidence Index for September. However, the Pound lacked follow-through and started to lose momentum, as traders realized the fact that there are still big differences between the UK and the EU, over a possible solution to the Irish backstop issue. Looking forward, the UK political development might turn out to be an exclusive driver for today’s sentiment, after the absence of any major market-moving economic releases from the UK.
The Cable bulls quickly recovered back above the 50-day moving average in an attempt to stay in control and keep the momentum alive. The buyers are still in control as price remains above the September trend line, however, they need to break above the key 1.25 psychological resistance and retest the recent highs at 1.2580 to confirm the bullish domination. The bears on the other hand, must break below the rising uptrend and the 1.24 support level, to turn the tables around and tilt the market sentiment to their side.
Support: 1.2420 / 1.2375
Resistance: 1.25 / 1.2580