GBP/USD Remains under pressure

UK election results dragged the Cable towards deep waters and the GBP/USD marked low at 1.2632. The pair bounced to the upside but however closed at 1.2742. 

Uncertainty is affecting widely on the pair, as Theresa May failed to ensure the needed support to come to a deal with the European union and has lost seats at the Common House and is lack of majority.

Technically speaking, the short-term is likely to remain bearish. On the four-hour time frame the price is moving well below its moving averages. 

RSI and stochastic had corrected from the extreme oversold readings and are more likely to support a new leg towards the downside. Both indicators had lost directional strength but yet remain well below their mid-lines. 

The political uncertainty has not disappeared and the Cable will be under pressure in the near future. And besides UK, the pair will be affected by next week’s FOMC decision. 

An unusual Thursday ahead

Lately markets are living on the edge over everything from terror attacks in London,  Middle East’s uncertainties, the turmoil surrounding Trump’s administration to the dramatic UK elections.

But at this very moment the tension on markets is extremely rising ahead of very unusual Thursday, as we have three quite important events.

The official views on inflation will be reveiled on the European Central Bank’s meeting and most important is will there be any change in its easing stance. Hopes somehow have been reinforced by the hawkish position of policymakers, but let’s see if Super Mario will keep his dovish stand about  QE, considering the attempts to down-talk the possibility to trim easings.

Next to come is the former FBI Director James Comey 's testimony. In case he state that US President Donald Trump had asked him to avoid investigating the "Russia-gate", possible impeachment issue will be on focus. Markets do not care much about politics as there is no huge impact in economy, but I expect that US dollar will be sent down across the board.

Alongside with the ECB and Comey’s testimony, this Thursday the UK will have their General Election. Current polls show Conservatives 44 pct and Labour on 34 pct. Conservative victory with or without absolute majority or laborist victory? Whatever happens there are no doubts that high volatility is guaranteed.