The UK general election is taking place today, and the question is, who will win? It’s pretty much a foregone conclusion. With polls suggesting that the general election is likely to result in a change of government after 14 years of Tory rule, the election results are awaited with calm.

Investors are wondering what effect they will have on the pound and the dollar, and of course on the FTSE 100.

As a rule of thumb, any kind of election or change in government has an impact on a country’s currency, especially if the results are unpredictable. Will the pound react with high volatility under the influence of the election results we will see at the end of today? Admittedly, the results seem to be a foregone conclusion, but it’s certainly worth bearing in mind two factors that could exacerbate this volatility are the fact that the information will come at a time of low liquidity in the markets: the late hour and the US holiday (the stock market closed for Independence Day). So, data from the UK, election results will appear in a period of low liquidity. It may be a little nervous.
But I believe that in the long run we will see more benefit from the change of government on the FTSE100 than on the British pound

FTSE a beneficiary of the UK election

The Labor Party’s program makes several positive points for industry.
They want to maintain tight control over public spending, manage the public debt, build more houses and want to get the country back on a path of stable economic growth.

One of Labour’s flagship programs is a plan to increase the supply of housing, they want to build one and a half million new homes.
I think when you look at the UK100, companies that have something to do with housing, with construction, can really gain a lot. Barra Developments, Berkeley Group are the leaders in this industry. Housing construction will increase demand for building materials, home furnishings, appliances, furniture, etc. Domestic demand can move the UK economy in the right direction.

Labour’s plans to renationalize rail operators and water suppliers, on the other hand, could be bad news for stocks such as Train Line, First Group and several others that have something to do with water supply or rail train operators.

A technical look at the FTSE100

FTSE100, UK100, elections UK 2024
FTSE100 H4 – the index has been rising since the morning , the election results may support the quotations of peripheral companies

FTSE100 H4 – the index has been rising since the morning , the election results may support the quotations of peripheral companies

On the technical side, we can see that the index has been rising since the morning and is heading towards the resistance of the falling wedge. Breaking out of the wedge may initiate a northward movement and the establishment of a new ATH.


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The above analysis is based on the PA+MACD strategy, a detailed description of which you can read HERE . I will talk more about the PA+MACD strategy applied to these currency pairs during the live trading sessions, which you can attend from Monday to Friday.
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