June 26, 2019, | SQUARED DIRECT – The British Pound dropped hard yesterday after disappointing CBI data and resurfacing hard-Brexit fears. UK PM Candidate Boris Johnson’s pledge to crash out of the EU on October 31 by threatening to follow the World Trade Organization’s rules for Brexit if EU refrains from cooperating. His competitor Jeremy Hunt, echoed his words by saying that he’ll only support no-deal Brexit if there is no better option to discuss with the EU.
In addition to all of this, less dovish comments from the US Federal Reserve policymakers also triggered the Cable’s recent pullback. Looking forward, quarterly Inflation Report and a press conference by Governor Mark Carney will be closely observed for fresh clues.
GBPUSD technical analysis
The Sterling bulls couldn’t break above 1.2760 after the 7th attempt since May. The bears showed up and took over the momentum by dropping the price back below the 200-day moving average until the Cable found support just above 1.2660. The bulls will try to protect this level and push the price higher to retest 1.2715 and 1.2760. On the other hand, the bears will attempt to break below 1.2660 and the 50-day moving average to take price back around 1.26.
Support: 1.2660 / 1.26
Resistance: 1.2715 / 1.2760
Trading in Forex and Contracts for Difference (CFDs), which are leveraged products, is highly speculative and involves a high level of risk. Therefore, Forex and CFDs may not be suitable for all investors because it is possible to lose all invested capital. Only invest with money you can afford to lose. Before deciding to trade, you need to ensure that you understand the risks involved. Seek independent advice if necessary. Please refer to our Risk Disclaimer.