We use a range of cookies to give you the best possible browsing experience. By continuing to use this website, you agree to our use of cookies.
You can learn more about our cookie policy here, or by following the link at the bottom of any page on our site.

Free Trading Guides
EUR/USD
Mixed
Low
High
of clients are net long.
of clients are net short.
Long Short

Note: Low and High figures are for the trading day.

Data provided by
GBP/USD
Bearish
USD/JPY
Bullish
Gold
Bullish
Low
High
of clients are net long.
of clients are net short.
Long Short

Note: Low and High figures are for the trading day.

Data provided by
Oil - US Crude
Bullish
Low
High
of clients are net long.
of clients are net short.
Long Short

Note: Low and High figures are for the trading day.

Data provided by
Bitcoin
Mixed
More View more
Real Time News
  • RT @zerohedge: Is The Market Up This Week? Just Ask The Fed's Balance Sheet https://t.co/6p01J9yAZ8
  • $USD: "The US Dollar is making a last-ditch effort to cling onto a key technical support level after dropping 3% from its 2019 high as risk appetite roars and the Fed inflates its balance sheet." - via @DailyFX Full Analysis: https://www.dailyfx.com/forex/fundamental/us_dollar_index/usd_trading_today/2019/12/14/us-dollar-outlook-fx-volatility-rising-from-extreme-lows-usd-levels-to-watch.html https://t.co/87cITJPVQa
  • The $NZD is testing resistance guiding the currency lower against its US counterpart for over two years. Will buyers prevail or be rejected yet again? Get your market update from @IlyaSpivak here:https://t.co/hRsbxhwotM https://t.co/ehlbb43gqd
  • very cool, very legal https://t.co/gsOxPiEdIw
  • $USDCAD is testing slope support into the close of the week with the immediate short bias at risk while above 1.3134/51. Get your USD/CAD technical analysis from @MBForex here:https://t.co/eE9yrNEU80 https://t.co/mszY7ouYRF
  • $EURUSD Daily Pivot Points: S3: 1.0966 S2: 1.1041 S1: 1.1085 R1: 1.116 R2: 1.119 R3: 1.1264 https://www.dailyfx.com/pivot-points?ref=SubNav?utm_source=Twitter&utm_medium=DFXGeneric&utm_campaign=twr
  • The British Pound’s relief rally may still have some room to run: volatility in the $GBP has dropped back to levels typically associated with periods of ‘positive developments’ in the #Brexit process. Get your market update from @CVecchioFX here:https://t.co/uzXRd8y4ck https://t.co/Nxf6opYgLd
  • Forex Update: As of 21:00, these are your best and worst performers based on the London trading schedule: 🇬🇧GBP: 1.31% 🇨🇦CAD: 0.12% 🇨🇭CHF: 0.09% 🇪🇺EUR: -0.09% 🇳🇿NZD: -0.11% 🇦🇺AUD: -0.48% View the performance of all markets via https://www.dailyfx.com/forex-rates#currencies https://t.co/z0x9cPG1TN
  • Commodities Update: As of 21:00, these are your best and worst performers based on the London trading schedule: Gold: 0.40% Silver: 0.09% Oil - US Crude: -0.47% View the performance of all markets via https://www.dailyfx.com/forex-rates#commodities https://t.co/fpuNos9jTO
  • RT @bbands: Most crypto currencies are at or near Bollinger Band Squeeze levels. Time to pay attention.
British Pound to Remain Lower after UK Election Surprise

British Pound to Remain Lower after UK Election Surprise

2017-06-12 03:50:00
Christopher Vecchio, CFA, Sr. Currency Strategist
Share:
British Pound to Remain Lower after UK Election Surprise

Fundamental Forecast for GBP/USD: Bearish

- UK election outcome greatly complicates the Brexit negotiations, which are inevitably poised to be looked at in the “hard landing” outcome once again.

- Political risk premium in the UK should remain elevated for the foreseeable future as another general election can’t be ruled out.

- The retail crowd is hanging onto its net-short GBP/USD position, even after the downswing around the election.

The British Pound was the clear loser last week, dropping across the board and more than -2% in some cases, as the results of the UK general election shocked financial market participants. Despite having a clear majority in parliament, UK Prime Minister Theresa May’s decision to hold a snap election will be panned and criticized now that the Tories have fallen below the 326 seat threshold in order to have an outright majority.

With now having 318 seats in parliament, the Tories’ hold on power is starting to slip. This is bad news for the British Pound. Pre-election, the hope was that a wider majority in parliament would allow Theresa May to push for a “soft Brexit” as she would be able to ‘afford’ losing the support of right-wing Brexiteers and still get legislation pass through the House of Commons. The reality of the situation is quite different. Now that a hung parliament will exist with the Tories holding onto a slim majority overall, and only a governing capability under an alliance with Northern Ireland’s DUP, political stability is very much in question. Don’t be surprised if after a few months of strenuous leadership, the Tory-DUP alliance breaks down and voters head to the polls for another general election.

Now that a “hard Brexit” outcome will likely be speculated over, the Sterling’s uptrend originating in mid-April is very much in question. If history is any guide, then the hung parliament outcome of the May 2010 general election may serve as a guidepost for what to expect: British Pound weakness immediately; and over the next month. GBP/USD could trade lower towards 1.2500 again while EUR/GBP could rally above 0.9000.

The week ahead offers plenty of market moving data and events that an already-volatile British Pound will run into. The May UK Consumer Price Index release on Tuesday should help set the table for Thursday’s Bank of England policy meeting. Similarly, wage growth and labor data due out on Wednesday will serve as an appetizer for the Thursday rate decision. A weak series of data this week would come at a time when the British Pound is already pre-disposed for more downside.

See how our Q2’17 British Pound forecast is holding up so far - check out the DailyFX Trading Guides.

--- Written by Christopher Vecchio, Senior Currency Strategist

To contact Christopher, email him at cvecchio@dailyfx.com

Follow him in the DailyFX Real Time News feed and Twitter at @CVecchioFX.

To receive this analyst’s reports, sign up for his distribution list.

DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.

DISCLOSURES

News & Analysis at your fingertips.