Pound dips after May fails UK Election

The pound fell sharply after Theresa May’s Conservative Party lost its parliamentary majority in the general election and U.K. now faces a ‘hung parliament.’ It looks like May’s gamble on an early election have been backfired as she is 8 seats short of majority, and Brexit negotiations also appear to be in danger. Currency pairs have been hugely affected overnight and are now expected to be much volatile on the market today. Jeremy Corbyn called on Theresa May to resign after the election’s results, by further stating that people “had voted for hope for the future.”

source: BBC News, CNBC

The FTSE 100 could benefit from the drop in Pound Sterling and could open higher on Friday, as other European indices surged up after the surprise result of the UK election. U.S. indices, on the other hand edged higher, as the Dow Jones jumped to a new all-time high on Thursday afternoon after Comey’s testimony. The president of the European Central bank, Mario Draghi hinted that further cut rates were needless and the ECB now expect the GDP to be 1.9 percent in 2017.

Major economic events taking place today is the U.K.’s monthly Manufacturing Production for April which is due at 08:30 GMT and the Canada’s Employment Change report for May, set to be released at 12:30 GMT. Meanwhile, oil prices stabilise after incurring losses earlier this week, and the Brent crude was quoted at $47.86 a barrel, while the U.S. West Texas was trading at $45.63 per barrel.

Technical Analysis

GBP/USD

GBP/USD

The GBP/USD moved towards a downtrend at the 1.29733 level yesterday as from 07:00 UTC. Later, around 21:00 UTC, a shooting star dragged the pair down from $1.29486 to close the bearish trend at $1.27420, within the same hour. Today, the currency pair edged lower by 1.45 percent as it traded around $1.2762 at 02:00 UTC. An analysis of the chart for today shows that the asset may fluctuate further.

EUR/USD

EUR/USD

On Thursday, the EUR/USD pair started tumbling on the forex market ahead of the European Central Bank Interest Rate Decision as from 08:00 UTC at the 1.12595 level. The asset recorded several pullbacks as from 19:00 at $1.12224 to close yesterday’s session bearishly by 23:00 UTC at $1.11883. It is seen much volatile today and could thus maintain this trend, therefore consider the Classic Binary Options to trade further on this pair.

EUR/GBP

EUR/GBP

Immediately after voting polls closed yesterday night, this currency pair hammered at 21:00 UTC from the 0.86567 level to reach its highest level for the day at 0.87905, the same hour. Today, the EUR/GBP pair started off a bearish session at the 0.87919 level at 00:00 UTC, followed by a much volatile trend. It is expected to fluctuate until further changes in the pound’s value affect its trend.

Things to watch on the market

Tip 1

Currency pairs such as the EUR/GBP, GBP/USD, GBP/JPY can be traded with the 60 Seconds Trading today as these assets may remain much volatile.

 

Tip 2

The DOW can be traded once it is available on the One Touch Options. Since Asian indices were seen higher, the Nikkei 225, the Kospi index and the Shanghai Composite can be traded.

 

Tip 3

The GBP/CAD, USD/CAD, and the TSX 60 index are recommended for today as events could uplift value for these assets.