The Pound closed very strongly last week amid a weaker US Dollar and a dovish Fed. However, the pair currently lacks any fresh catalysts in order to extend its latest gains. In fact, the latest updates on the UK PM candidate Boris Johnson could weigh on the British Pound. Leading British lawmakers, including another candidate for the UK PM’s race Jeremy Hunt, have stepped forward in demanding clarification of the likely fight between Boris and his girlfriend that led police towards Mr. Johnson’s home during after-hours of a party. Market participants are awaiting to see how will Boris Johnson justifies the latest key incident, as he still needs to please 160,000 Tory voters to become the UK PM.
The Sterling broke above the 200-day moving average and currently sitting just below a key resistance level, 1.2760. A pullback from these levels is expected in order for the bulls to build momentum and attempt to take out this important resistance and retest 1.28. The bears on the other hand, will have to defend 1.2760 with everything they have got to remain in control.
Support: 1.27 / 1.2660
Resistance: 1.2760 / 1.28