The British Pound was attempting to recover above 1.22 during yesterday’s session, but it was quickly pulled down after PM Boris Johnson has said that he will take Britain out of the EU on October 31 without a Brexit deal if Brussels does not rewrite the deal it signed with Theresa May. Today, Bank of England is widely expected to push back against expectations of rate cuts even though the risk of a hard Brexit darkens economic prospects. However, the central bank has little room to sound hawkish with the no-deal Brexit risk is increasing day after day. That said, with the Sterling already trading just above the all-time lows, the BOE would want to avoid sounding too dovish, as it could result in a bigger slide in the Cable.
The Sterling bulls attempted to break above 1.2250 but they were quickly rejected by the bears, pushing price back towards 1.21. The buyers are currently defending the 1.2120 support level, attempting to find momentum to push it higher. Failing to do so, the sellers will take back control sinking the Pound for further weakness towards 1.2050 and possibly 1.20.
Support: 1.2120 / 1.2050 / 1.20
Resistance: 1.22 / 1.2250 / 1.23