The business week in London markets starts on Tuesday after the May Day holiday on Monday. The pound has continued to gain following British PM May’s April-18 call for a general election, to be held on June 8. Cable clocked a six-month peak at 1.2965 and closed out on Friday at its highest weekly closing level since the last week of September. Incoming polls have been confirming that the governing Conservative Party is on course to win a sizable majority at the June 8 election, giving the pound a lift on the view that this will give PM May a clear Brexit mandate and greater flexibility in upcoming negotiations. There is a sense that whatever economic Brexit reckoning is yet to come, it is still some way down the road, with the negotiations not likely to start in earnest until after the German elections in September.
Similar behaviour like Cable, was noticed for GBPAUD, which clocked 7 months high on Friday at 1.7362. However, the pair today prompted a SHORT position in the 4-hour chart after marking 4 consecutive down candles, and breaking also the 20-period EMA. Also in 1-hour chart, the 20-period EMA, crossed downwards the 50-period SMA in morning. The RSI is at 33, while MACD turned negative since earlier today.
Hence GBPAUD drifted it back today to 1.72 area. Entry was taken at 1.7212, while by considering ATR (14) in the 4-hour chart, target for today was set at 1.7165. Support was set at 1.7262.
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