Daily Forex Market Preview, 08/06/2017
The UK's general elections result is likely to see more uncertainty in the near future for the British pound. Although votes are still being counted, the prospects of a hung parliament are starting to become a reality, which could influence the Brexit negotiations that start in just 10-days.
Theresa May's Conservative party is seen winning 315 - 325 seats, according to projections from Sky News. The idea of calling for a snap election has now also brought Ms. May's leadership under the scanner. In a speech, Ms. May called for stability but refused to comment any further.
Elsewhere, the Euro closed bearish after yesterday's ECB meeting saw no major changes from the central bank. The market reaction was mostly muted, largely thanks to the leaks that emerged a day before the ECB meeting.
The developments sent the US Dollar index higher as the buck has posted two consecutive days of gains after slipping to a 7-month low.
EURUSD intraday analysis
EURUSD (1.1202): EURUSD slipped to 1.1200 support level yesterday with price action currently seeing some consolidation at this support level. The bias, however, remains in favor to the upside with the bull flag pattern still in play. Only a decline to 1.1100 and below will flip the bias. On the 4-hour chart, price action shows an ascending wedge pattern from which price broke out yesterday. We currently notice a retracement and the upside could be limited to 1.1245. Failure to break out above 1.1245 will signal a possible reversal with 1.1100 in focus.
GBPUSD intraday analysis
GBPUSD (1.2755): The British pound broke past the 1.2800 support level earlier today, and this confirms the downside in prices. The head and shoulders pattern from the daily chart is now in play, and we can expect to see a decline to the projected target of 1.2600. There is possible scope for further downside to come, with the next main support seen at 1.2400. This is a key support level that is pending a retest, so the likelihood of the downside in the GBPUSD is high.
USDJPY intraday analysis
USDJPY (110.24): USDJPY has managed to lift off comfortably from the support level formed near 109.50 - 109.25 that was mentioned earlier this week. Price action is expected to continue to the upside with 110.79 now the next main target. A daily close above this level will see price reversing from the opening price of 110.435 from 6th June. A bullish continuation here will signal the upside with USDJPY potentially eyeing for 112.50 if the breakout above 110.79 can be sustained. To the downside, the support zone of 109.50 - 109.25 will remain key and a break down below this level will see price slip back to 108.30.