Cable bounces off near-term support to sit near the highs for the day
The pound was a little softer in the European morning as it retraced overnight gains a little in a move back towards 1.2210-20 but buyers leaned on the resistance-turned-support level around 1.2220 to bounce back higher today.
Currently, price is breaking to new session highs of 1.2262 as buyers are looking to extend the momentum beyond near-term resistance around 1.2250-55.
Further resistance is only seen around 1.2290-00 before the 27 August high of 1.2310 will be eyed in any move to the upside.
As mentioned yesterday, the past two days certainly poses some good news in parliament capable of allowing the pound to run higher but I reckon any further gains from hereon may be a bit more tricky.
As the "surrender bill" now heads to the House of Lords, it remains to be seen how confident lawmakers can be in getting the bill turned into law before parliament is prorogued next week. As such, pound sentiment will now depend on that focus in the sessions ahead.
At the same time, Boris Johnson is still campaigning for an election that may not yet come but if the bill can be filibustered into the weekend, there's every chance we may see one called at the last minute via a no-confidence motion tabled by Jeremy Corbyn.
Similar to yesterday's sentiment, I would still be skeptical of any further gains in cable above 1.2300 unless it is backed up by substantial developments in parliament. Right now, a no-deal Brexit is still a long way from being off the table so I would still argue for shorts if we move closer to the figure level.
So, let's see what the next 24 hours brings us but for now, the hopeful optimism continues as rebel/opposition lawmakers continue to have it their way.
