The Pound closed negatively for the third consecutive day, lowest since mid-February, after a robust US Dollar move lifted the currency across the board as the Federal Reserve is not seen as cutting interest rates. Moreover, talks between Theresa May’s conservatives and Jeremy Corbyn’s Labour are not going anywhere fast. Labour blames the Tories for refusing to compromise and the ruling party blames the opposition for stalling. In addition, many conservative MPs are plotting to remove May from power. Some are proposing rule changes that will force another vote of confidence which is prohibited by the current party rules. The sentiment around the British Pound is turning bearish day by day, without a real breakthrough, the Sterling could face more weakness ahead.
The Pound broke below yet another key support level at 1.2930 by closing just above 1.29. If the US Dollar bulls take some profit during today’s session, we could possibly see a small bounce on the Sterling towards 1.2930(R1). On the other hand, if the bears keep this momentum alive and break below 1.29 (S1), then the next possible support is around 1.2850 (S2).
Support: 1.29 / 1.2850
Resistance: 1.2930 / 1.2960