The British Pound was still stuck in a limbo on Friday, however during the weekend, EU agreed to sign a deal that offers a three-month Brexit extension to the UK, to January 31 2020. The Sterling will likely benefit from this news during today’s session but only in the short-term, as it only prolongs the Brexit uncertainty for three more months. Traders will now focus on Fed’s rate decision due on October 30, and position themselves accordingly.
The Sterling buyers remain in control for now as they were able to keep price in the Bullish Flag disregarding the fundamental uncertainty. However, a risk to the downside is higher in the medium-term as 1.2850 will likely act as a resistance for now pushing price to potentially retest 1.2715 in the upcoming few days. The bulls need a close above 1.29 to resume the recent bullish trend.
Support: 1.28 / 1.2715
Resistance: 1.2850 / 1.29