The Pound went higher yesterday after fresh reports that some of the British lawmakers are wishing to prevent a “no deal” Brexit by secretly plotting to stop the PM, Boris Johnson from his “do or die” Brexit pledge. However, PM Johnson is less worried about the MPs actions and believes the European Union will cave in at the last minute and do a Brexit deal with him to "save Ireland". The Sterling has been under pressure over the recent weeks as it became increasingly clear the PM Johnson could deliver a ‘no deal’ Brexit if he truly desire such an outcome and all indications thus far is pointing towards that direction. Looking forward, if today’s Average Earnings Index and Claimant Count Change disappoint traders, it will accelerate the downside pressure taking price towards 1.20.
The Sterling retested the broken support 1.2085 and held as a new resistance signaling more potential downside on this pair. The bears will be challenged yet again around the psychological figure 1.20, a break below that level would accelerate the fall towards the all-time-low 1.19. The bulls on the other hand, would need to break above 1.2085 and the 50-day moving average to temporarily halt this recent bearish momentum.
Support: 1.20 / 1.19
Resistance: 1.2085 / 1.22