The Pound rebounds a little higher as the US Dollar loses some steam due to a drop in US Treasury yields. US Treasury yields dropped early this week as investors priced in the possibility of the Fed changing their initial hawkish rate hike plan for 2019. Investors priced in this possibility as early as Monday given that an announcement of a change in plan might occur during this week’s FOMC meeting on Wednesday. For today, Sterling traders need to monitor the movement of US Treasury yields and the release of the US housing figures, given that these two catalysts are expected to affect the pair from the US Dollar’s side. As for the pair’s movement from the Pound specifically, Brexit developments remain the main catalyst and investors need to constantly monitor any updates related to this matter.
Prices are currently stuck between the 13 and 50-period moving average as a reflection of the indecision within the investment community. On a short term scale, a break above the 50-period moving average will signal a rise towards the 1.2650 resistance level, while the break below the 13-period moving average will signal a drop towards the 1.2530 support.
Support: 1.2530 / 1.2425
Resistance: 1.2650 / 1.2700