The Sterling remains strong as the greenback continues to get weaker, while traders consider the US Federal Reserve’s dovish tone is a signal for a possible start of a bear market. Every single weak economic data from now until July’s Fed meeting could play a major part in Powell’s decision making. In terms of politics, the British PM Candidate Boris Johnson reiterated his Brexit deadline pledge while showing preparedness to take help of the EU sources in case of a hard Brexit and/or Irish border issue where he favors soft boundaries. Market participants remain uncertain when it comes to the political future of the UK, but for now traders are fully focused on the weaker Dollar and Fed’s possible rate cut next month.
The Sterling retested the 200-day moving average and bounced to retest 1.2760 pivot resistance level. A break above that line will likely take price higher towards 1.28. Meanwhile, the bears will attempt to take back short-term control by breaking below 1.27 and pushing the Cable towards 1.2660.
Support: 1.27 / 1.2660
Resistance: 1.2760 / 1.28