Sterling remains in red on hard Brexit concerns
Cable remains in red on Wednesday’s and extends previous day’s nearly 1.5% fall, to hit new one-week low at 1.3072.
Market reacted negatively on PM Johnson’s decision to limit transition period after the UK leaves the bloc, which traders have seen as signal of possible hard Brexit.
Profit-taking from four-month rally and strong advance after UK election also contributes to weakness.
Tuesday’s fall broke through important supports (daily Tenkan-sen / Kijun-sen) and pressures important levels at 1.3050 zone (last Thursday’s spike low / 20 DMA) loss of which would expose key 1.30 support zone.
The sentiment has soured and south-heading daily indicators add to negative near-term outlook.
UK CPI data is key event for sterling today (Nov CPI y/y 1.4% f/c vs 1.5% prev) as inflation is in downtrend in past two years.
Inflation data will be closely watched as signal for BoE, ahead of central bank’s policy meeting tomorrow.
Res: 1.3134; 1.3167; 1.3183; 1.3282
Sup: 1.3072; 1.3050; 1.3012; 1.3000