The Pound is selling off early this morning, possibly in response to the comments by Britain and the EU on Sunday that a lot more work would be needed to secure an agreement on Britain's departure from the Eurozone. Further, a Deloitte survey warned that Brexit uncertainty would force the UK firms to reduce hiring over the next 12 months, possibly adding to the selling pressure around the Cable. In addition, the Bank of England's Ramsey told The Telegraph on Sunday that the central bank's ability to support the economy would be held back if Brexit is delayed again, denting the market sentiment even further. There is no data scheduled for release in the UK today, but volatility is to be expected, caused by further Brexit back and forth talks.
The Cable bulls touched 1.27 and started to roll over as the buyers are starting to lose momentum after a huge 500 pips move. A pullback is necessary after such gains, as the bears are looking to retest 1.25 and possibly further. The bulls need to find support and protect their gains in order for a possible push to the upside.
Support: 1.2575 / 1.25
Resistance: 1.2705 / 1.2760