The Sterling is struggling to break above the 50-day moving average even though the UK parliament yesterday backed a general election on December 12. Market sentiment remains confined as traders are waiting for the FOMC decision. The Fed will most probably cut rates by 25 basis points, which is already priced in the market. However, market participants fear of a rate cut pause signal from Powell, which will send the Treasury yields and the US Dollar higher across the board.
The Pound buyers were able to breakout from the Bullish Flag Formation; however, price is still finding resistance around the 50-day moving average. If the bulls find the required momentum then that would imply a continuation of the rally and could pave the way for a re-test of the Oct. 21 high of 1.3012. On the other hand, any loss in momentum will probably pull the Cable back towards 1.28 invalidating the recent Flag breakout.
Support: 1.2850 / 1.2790
Resistance: 1.2950 / 1.3012