Sterling underperformed, slipping to 1.2295 from yesterday’s 1.2335 on Brexit worries resulting from a lack of progress in a new round of talks between the UK and EU. Speculation continues to about negative rates in the UK following last week’s Bank of England policy meeting. Even the Euro benefitted against the beleaguered Pound. The EUR/GBP cross saw the shared currency gain 0.5% to 0.9145 from 0.9095 yesterday. The last Commitment of Traders report which we highlighted saw a decline in speculative GBP shorts to -GBP 15,998 contracts from the previous week’s -GBP 24,048.
GBP/USD traded to an overnight low at 1.22512. Immediate support lies at 1.2250 followed by 1.2220. Immediate resistance can be found at 1.2340 and 1.1390 (overnight high 1.23895). Sterling saw the most volatility amongst the Majors. Look for a likely range today between 1.2250-1.2400. Prefer to buy on dips with the 1.2200 handle on it.