Sterling continues to spiral down and hit new lowest levels since early Jan, as political turmoil in the UK intensifies and fears of no-deal Brexit rise that overshadows EU elections Prime Minister Theresa May is under strong pressure to quit and is expected to announce a date of her departure, likely on Friday. Boris Johnson is leading on the list of May’s successors and markets see risk of further fall of pound if he becomes the PM. Technical studies remain firmly bearish and helped with negative sentiment, as cable holds in red for the thirteenth straight day and eyes targets at 1.2476 (2018 low) and 1.2397 (2019 low, posted on 3 Jan). Mild corrective actions are expected to offer better opportunities to re-enter bearish market, but deeply oversold daily studies so far lack any firmer signal. Falling 5SMA offers initial resistance at 1.2684, guarding more significant barrier at 1.2791 (falling 10SMA) which should limit stronger upticks and keep bears intact.
Res: 1.2650, 1.2684, 1.2719, 1.2773
Sup: 1.2600, 1.2580, 1.2528, 1.2476