The British Pound fell during yesterday’s session as elections to the European Parliament showed a dramatic surge in support for far-right parties across Europe and the UK Brexit party was one of the day’s big winners, highlighting the risk of a no-deal Brexit. Nigel Farage, the Brexit Party Leader, had won the MEP seats for the South East of England. The Market might experience more volatility as odds for significant political changes are increasing. Traders are getting ready for the worst-case scenario, a no-deal exit, which could undermine the economy and send the British pound sharply lower. Today, market sentiment will likely remain to the bears’ side, as traders will position themselves for further downside potential.
The Pound bulls will likely attempt to retest 1.27 during today’s session, just below the 50-day moving average. That’s where the bears are expected to be located to reject that level and push the Sterling lower towards 1.2650 and even 1.2600, as both the market sentiment and the trend remain bearish. However, if the bulls were able to break above 1.27 and ideally 1.2750, then that could change the whole market structure and will open doors for more upside potential.
Support: 1.2650 / 1.26
Resistance: 1.27 / 1.2750