The Pound soared more than 100 pips yesterday after a struggling greenback and a positive Brexit development, which declined the odds for a no-deal Brexit. The US Dollar sell-off in the late after-noon was caused by Fed Williams bearish comments, advocating cutting rates as soon as possible. In political news, the UK’s Members of the Parliament passed an amendment to make it harder for the incoming PM to suspend the Parliament before Brexit, which reduced the odds of a no-deal departure and pleased the Cable bulls. Adding to the Sterling’s strength were the comments from the European Union’s Brexit negotiator Michel Barnier that the EU is ready to work on alternative arrangements for Irish border issue.
The Sterling bulls were rewarded yesterday after a strong 100 pips move to the upside. Currently, the buyers face an important resistance level, 1.2560, which is also the bearish trend line connecting the highs of June 25 and June 28. If this bullish momentum persists, then the buyers could push this pair above 1.2560, towards 1.26 and beyond. However, if the bulls lose esteem, the bears will most definitely show up and take price lower targeting first 1.25 and possibly lower.
Support: 1.25 / 1.245
Resistance: 1.2560 / 1.26