The Pound drops towards the 1.2750 level as investors continue to price in the possibility of the UK House of Commons voting against the proposed Brexit deal by Prime Minister Theresa May. Such scenario is highly probable in the eyes of investors given that the proposed deal is facing backlash from both Labour Party (May’s rival political party) members and May’s fellow party members. Additionally, the Sterling was pressured lower by a stronger greenback which gained after the better than expected US Consumer Confidence figures. For today, investors need to monitor the results of the BoE report regarding the effect of the proposed Brexit deal on the UK economy. Moreover, investors need to also keep an eye on the result of the US GDP report as well as Fed Powell's speech given that these two events are expected to affect the pair from the greenback’s side.
The Pound drops all the way towards the 1.2729 support level and consolidates. After reaching this support level, investors will await the results of the different economic events set for today before positioning themselves for the next move in the pair. Depending on the results of these economic events, the pair will either bounce off this support level and break above the 13-period moving average exposing the 1.2797 resistance or break below the support at 1.2695 exposing the 1.2655 level.
Support: 1.2695/ 1.2655
Resistance: 1.2727 / 1.2797