The British Pound bounced above the 50-day moving average despite weak UK retail sales, after Brexit Party leader, Nigel Farage, announced that he would not be seeking to put up Brexit Party candidates in the snap general election. Previously, it was rumored that Farage could field some 600 candidates for the upcoming election, which would have led to split some of the vote with the Tory party, but yesterday he confirmed that they would not contest. Consequently, the odds have increased that the UK PM Johnson and his Tory Party will win the majority on December 12, sending a clear signal to markets that Brexit will proceed under the plan agreed to in October. An outcome that reduces uncertainty around Brexit. Today, this positive development might continue to push the Sterling higher, giving the absence of any UK data in the economic calendar.
The Cable bulls broke above the 50-day moving average, opening doors for much further upside potential, however price needs to clear out the 1.29 resistance level first, to confirm any further bullish move. If the buyers were able to break above the 1.29 level, then a retest of the recent highs, 1.2975 or even 1.30, will be a high probability scenario.
Support: 1.2816 / 1.2771
Resistance: 1.29 / 1.30