The Pound closed negatively yesterday as concerns of a hard Brexit increased after Boris Johnson led the race of the UK PM with highest votes during the first round of Tory poll. While political plays will be the main center of attention to direct the market sentiment, today’s comments from the BoE Governor Mark Carney will be closely observed for fresh insights. Given the latest hawkish comments from some of the central bank’s policymakers, Governor Carney might dismiss those opinions and consider Brexit as a big challenge to raise rates in the near future.
The Sterling broke below the short-term counter-trend line and the 50-day moving average, signaling a possible bearish continuation on this pair. The first challenge the bears will face is the 1.2650 support, if they successfully break below it, then the next challenge will likely be 1.2615. The bulls on the other hand, need to find momentum and push price back above 1.27 to regain control.
Support: 1.2650 / 1.2615
Resistance: 1.27 / 1.2750