The Pound traded higher, lower and then higher again on Friday as traders were trying to digest PM May’s resignation on June 7th, as markets adopted the “Buy the fact” strategy. Furthermore, the broad Dollar weakness amid a recent weak US fundamentals added to the Cable recovery from four-months lows of 1.2605. However, the future of the Sterling remains uncertain as PM May’s successor, Boris Johnson, is known for his hard Brexit stance, which will likely keep traders cautious and on the edge by possibly limiting any corrective upside potential. The UK markets are closed today in the celebration of Spring Bank holiday so we expect a very slow day in the markets.
The Pound bulls continue their recent recovery by breaking above 1.27 on Friday. The next challenge the buyers will face is the 1.2750 resistance level and the 50-day moving average (blue line). A break above this area could push price higher towards 1.28. The bears, however, need to break back below 1.27 to regain control.
Support: 1.27 / 1.2650
Resistance: 1.2750 / 1.28