The Pound continues its slide lower as uncertainty surrounding the Brexit outcome grows. Not only does Prime Minister Theresa May have to reach a deal that would convince the EU but she should also reach a deal that would convince the UK Conservative Party. This fact alone makes it really difficult for May to conclude all this controversy which raises the probability of a “no deal” Brexit. Yesterday, investors sold off the Pound heavily after Theresa May made a move that heavily raises the chance of a “no deal”. May basically set a date for Whitehall officials to start preparing for a “no deal” Brexit and begin to script legislation for this scenario.
Following the break below the 1.2921 support level, prices rose back up as a means to retest the significance of the break. It is evident from the chart that yesterday’s break below the support level was significant given that prices are now rejecting to break above this level. Simply, the 1.2913 support level is acting as a resistance level. As negative sentiment surrounding Brexit continues, the next key level to monitor is the 1.2840 support level.
Support: 1.2921 1.2840
Resistance: 1.2960 1.3020