Sterling British pound rates analysis due the upcoming elections
The main event this week is the UK’s General Election. Voting takes place on Thursday, June 8th, with an exit poll due shortly after 22:00 (BST) and results to filter through over Friday morning.
When Theresa May called the snap vote on April 18th, the pound rallied from just above the $1.25 level to eventually breach $1.30 in May- wrote about this here
The pound appeared to be firming up on hopes of a smooth exit led by Mrs. May. It might be a hard Brexit but the market didn’t seem to mind too much as long as domestically the government was secure. An early election and big majority for the pound was seen as smoothing the path for Britain’s exit from the EU. But the assumptions investors have been working to are no longer certain as the polls have narrowed.
Labour has closed the gap to the Tories and a YouGov poll published on Wednesday suggested the Conservatives could even lose some seats. This has left the result of the election far from certain, although we must stress that overall, the polls still suggest Theresa May will increase her majority in the House of Commons. Uncertainty over the result has left the pound trailing.
The picture of Brexit negotiation with EU, which is scheduled to start on June 19, is highly uncertain, including the stance, the strategy, the personnel.
Also, we need to consider the last events: the London Attacks, This is the third such attack in the U.K. in 2017. Two weeks ago, a bomber detonated a device outside the Manchester Arena following a concert by Ariana Grande. In March, a man drove a car into pedestrians on London’s Westminster Bridge, killing four people and then stabbing a police officer to death.
Research suggests that the impact of terrorism on electoral outcomes isn’t straightforward. Political scientists have found that, in general, terrorism can increase support for conservative candidates
From Technical view we can see some things:
Expect strong resistance below 1.3300 to bring larger down trend resumption, while we have first to meet 1.3050. On the downside, break of 1.2740-1.2800 support will indicate short-term topping. If it will fail to stay above the level it will be turned back to the downside for 1.2640 support, if 1.3050 will break up I expect to see the pound /sterling go to 1.3120 or even 1.3220
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This review does not including any document and / or file attached to it as an advice or recommendation to buy / sell securities and / or other advice