GBPUSD Before UK Election & GBPEUR as well!
Currencies are motivated by many factors. Yesterday, as the Supreme Court announced its decision on Presidential immunity the market saw an increase in US yields and the US$. Could it be that the market is preparing for a tax cutting, tariff raising US President Trump?
The UK election is on Thursday. But, it may be that the result is already 'priced in'. Meaning that if we do get a Labour majority government, as the result is widely expected the market may see no reason to move the Pound.
On a technical basis, GBPUSD tested support at 1.2620 yesterday, but the support level has remained intact. This afternoon Fed Chair Powell speaks, and on Friday after the UK election we have US employment data released. This data has been strong for many months. If, after the US employment data GBPUSD moves lower it also faces support at 1.2540. It could be that price tests this support and then finishes its corrective move lower and resumes its short-term trend higher towards 1.2895. Possibly dragging GBPEUR higher as well as the French nation votes in the second round elections. Maybe to elect either a hung parliament or the Far-Right National Rally (NR), being responsible for domestic policy. Both outcomes can be seen as negative for the Euro. with a hung parliament not being able to tackle the problematic budget deficit and the NR being euro sceptic.
Lets see what happens.