Pound surges after Brexit Party “stands down”

Intermediate
  • The spotlight shifted to the UK on Monday, where general election politics had a significant impact on the Pound.
  • Nigel Farage stated that the Brexit Party would not put candidates up for election in those parliamentary seats that were won by the Conservative Party in 2017.
  • This is seen as a positive for the Tories, as it means that the Leave vote will not be split in these constituencies.
  • The Pound liked this development, as it brings greater certainty to markets with less chance of a hung parliament, with GBPUSD leaping from 1.28 to nearly 1.29.

GBPUSD risks higher

A Monday surge up through the November down trend line and also above 1.2832 and 1.2878 resistances, to reject Friday’s selloff through key 1.2787 support, to shift risks higher for Tuesday.

  • We see an upside bias for 1.2898; break here quickly aims for 1.2917 and maybe notable 1.2976.
  • But below 1.2799 opens risk up to 1.2768, maybe 1.2749.

Intermediate-term outlook

Range breakout parameters: Range seen as 1.2656 to 1.3013.

  • Upside risks: Above 1.3013 sets an intermediate-term bull trend to aim for 1.3177, 1.3397, 1.3473 and 1.3618.
  • Downside risks: Below 1.2656 sees an intermediate-term bear trend to target 1.2516, 1.2405 and 1.2197.
  •  

4 Hour GBPUSD Chart

GBPUSD chart

Editor in chief

Steve Miley has 29 years of financial market experience and as a seasoned expert now has many responsibilities. He is the founder, Director and Primary Analyst at The Market Chartist, the Editor-in...continued

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