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Market View

GBPUSD is "dancing" on Election's rhythm

Thursday, April 20, 2017 5:52 AM GMT

The Cable is reacting early and positively on the Election announcement. The markets anticipate optimistism for the upcoming Brexit negotiations and could help a soft Brexit scenario. Most polls indicate an easy win for Theresa May (Tory party) against Jeremy Corbyn’s Labour party. Later today, we are expecting BOE's Governor Carney speech in which we may get useful information after May’s sudden move.

GBPUSD Technical View


The pair has broken out a triangle (white) and we have marked the potential target of it. You should see a confluence with 38% Fibonacci level as well.


Below, we have noted two potential scenarios according the supports and resistance and the current price action. The Cable is consolidating close to the highs so it may have one more bullish leg close to the 78.6% Fibonacci level. Regarding the second scenario, we may have a pullback close to the triangle and then back again.


The pair seems to form a bullish flag. However, if price violates 1.277 to the downside, then the pattern is broken. In addition, we have noted a major support zone around 1.257.


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