Sterling rebounds after brief probe below 1.20 as traders await parliament’s action
Sterling bounced to the levels near 1.21 barrier, making a probe below psychological 1.20 support (the pair dipped to 1.1958) short-lived for now and signaling that that 1.20 obstacle will not be taken out on first attempt.
Strong rebound makes near-term direction unclear as hammer candle is forming on daily chart and obstructing negative picture, formed on five-day downtrend and break below key 1.20 support.
Additional boost to sterling was provided by fresh dollar’s weakness on downbeat US data, as Manufacturing PMI fell below 50 threshold (Aug 49.1 vs 51.1 f/c) for the first time three years.
UK lawmakers will vote tonight in attempts to regain control of the parliament and prevent scenario of no-deal Brexit, but will have very limited time in case of success, to try to force another Brexit delay for three months.
PM Johnson favors Brexit on 31 Oct, regardless to the conditions and said that never ask the EU for further Brexit delay, but would call for a snap election instead.
Fresh optimism among traders keeps pound afloat above 1.20 pivot, with further recovery seen on close above 1.21 handle that would generate initial reversal signal and sideline immediate bears.
Res: 1.2134; 1.2144; 1.2175; 1.2188
Sup: 1.2070; 1.2015; 1.2000; 1.1958