Price begins to track under the 200-hour moving average
The 50.0 retracement level and the 200-hour MA (blue line) were pivotal levels in limiting the downfall yesterday but we're possibly starting to see buyers crack under the pressure of rising risks of a no-deal Brexit.
Price is starting to move back under the 200-hour MA now and back below the 1.2200 handle as sellers look to establish more near-term control in cable.
I reckon a move under 1.2175-90 will allow them to firmly stay in control unless Brexit headlines come about to mess things up again. Further support beyond that lies around the 50.0 retracement level again @ 1.2163.
Given yesterday's developments, I'm still quite surprised the pound has been this resilient. We're now either headed towards a general election or a no-deal Brexit and either of which doesn't make a compelling case for the currency to rally.
Sure, lawmakers may still have a shot at stopping no-deal by forcing a general election but even then there is still so much uncertainty about what may happen next.
Labour remains extremely weak in their current position and if anything else, Farage's Brexit party seeks to benefit most in all of this and that's not exactly a good thing for the pound either in my view as it may serve to just prolong Brexit uncertainty in the UK.
That said, you can't argue with technicals as seen yesterday but perhaps we're starting to see things unravel now as near-term price action begins to favour sellers more.
