The British Pound surged higher yesterday after German Chancellor’s positive comments regarding a soft Brexit. However, British PM’s proposal to ditch backstop will likely be firmly rebuffed when he visits Berlin today, as Germany will not change its stance regarding the Irish backstop to accommodate Boris Johnson’s wishes. As a result, the Sterling bulls remain hesitant as traders await details of the UK PM’s EU visit, followed by the FOMC minutes, for fresh impulse.
The Sterling bulls attempted to break above 1.2177 but failed to do so for the third consecutive time. Today’s fundamental catalyst will likely push the Cable to break out from the 1.2177 and 1.21 trading range. A break above 1.2177, the bulls will be eyeing 1.2250 as their next target. On the other hand, a break below 1.21 will give the bears enough momentum to retest this year’s low 1.2017.
Support: 1.21 / 1.2016
Resistance: 1.2177 / 1.2250