The British Pound whipsawed yesterday after consecutive confusing headlines regarding Brexit deal; however, optimism prevailed as the bulls managed to close the pair higher above 1.28 for the first time since May. Comments by French President Macron, saying that a Brexit agreement was being finalized, provided a much-needed support for the Cable bulls. Additionally, German Chancellor Angela Merkel said that Brexit talks are now in the final meters, which also provided an additional lift to the Sterling. Nevertheless, the Pound was weighed down earlier this morning after reports saying that the DUP could not support Boris Johnson’s Brexit deal. The sentiment could probably be dented after that report which will likely lead the pair to a much-needed consolidation after a huge 600 pips bullish move during the last few days.
The Cable bears are attempting to break back below 1.28 and push price to retest the critical support level, 1.27. The bulls need to protect that support level with everything they have to keep the market structure in their favor. If however, the sellers manage to break below 1.27, then a drop to 1.2560 will be a likely scenario.
Support: 1.2710 / 1.2560
Resistance: 1.28 / 1.2885