As a result of announcement made by UK Prime Minister, Theresa May regarding earlier parliamentary elections we observed dynamic appreciation of sterling pound. This strengthening resulted in a strong increase in cable, which reached level 1.2845. During following days we observed a relatively narrow consolidation in the zone, which from the point of view of the daily chart could be a turning point changing general trend.
Although after few days market hit the top and it would seem that over next days or even weeks the rally should continue and as a result we would expect to be able to retest the upper limit of the previous consolidation of 1.3450. Ultimately, this trend lasted relatively shortly.
Last week markets and in particular pound sterling shook news of a bomb attack at the Manchester Arena, which led to death of at least 22 people. 59 others have been hospitalized with more or less serious injuries. This also translated into GBP depreciation, which eventually led to a decline in cable prices.
Now, once again market is within a narrow consolidation, and if only 1.2775 is broken, we could expect continuation of declines even to around 1.2600, which was earlier defeated by aforementioned decision to set up UK parliamentary premature election. This has not been tested until now (as a support), which, according to the polarity policy, should occur.
Early elections are planned for June 8th. It is then that Britons will go to the polls to select their representatives in Parliament in general election. If current prime minister succeeds in obtaining parliamentary majority, which will allow her to rule independently we would expect further appreciation of GBP. So potential short-term downturns will be an opportunity to position for this event?
