Mr. Johnson became the new British Prime Minister after beating his rival Jeremy Hunt. At his speech as the new PM, Johnson reiterates October 31 deadline for Brexit. The British Pound gained some ground at the new PM announcement despite major negative market consensus. Traders have already priced in the news ever since it became apparent in the media, thus we could see the Cable pushing to the upside in the short-term. Politically, Johnson’s win triggered key resignations from some of the key UK lawmakers, including International Development Secretary Rory Stewart and Justice Secretary David Guake and Foreign Office Minister Sir Alan Duncan. Today, traders will be looking forward to the ex-PM May’s last speech, for any possible optimistic view that resonates with the current market sentiment.
The Sterling was dropping throughout the day until it found support at 1.2420 pausing the bearish market sentiment in the short-term. If the buyers find enough momentum to push price beyond 1.2450, we could probably see a 1.25 retest in today’s session, where the bearish trend line is located. However, if the sellers were able to resume their bearish momentum by taking out the 1.2420 support, then a retest of the yearly low, 1.2383, will be on the cards.
Support: 1.2420 / 1.2383
Resistance: 1.2450 / 1.25