The UK parliament elections have shocked the market, which triggered a new round of GBPUSD selling pressure. The UK PM May has lost the majority in in the UK parliament which is going to make the Brexit talks more difficult and this market theme is going to keep GBPUSD under pressure in the coming week.
The technical GBPUSD pattern has broken to a 7-week low after breaking below 1.2752 key support level which now is expected to act as resistance. On the downside we don’t have much support level until the big psychological number 1.2500. We can not as intraday support level last week low of 1.2633 where a break and a daily lose below will open up the door for a retest of 1.2500. The stochastic indicator is already in oversold conditions so early in the week we can expect more consolidation before the downside to resume.
The UK economic calendar looks heavy with plenty scheduled risk events. We start the new week first with the Inflation Report Hearings. On Thursday the CPI inflation figures should be the main catalyst for higher volatility. The market consensus is for a flat reading on inflation. Wednesday we have the Unemployment figures while Thursday is the main risk event as the BOE is expected to announce its interest rate decision. The market consensus is for BOE to keep monetary policy unchanged.
Previous GBPUSD Weekly Forex Forecast
GBPUSD Weekly Forex Forecast – 5th to 9th June 2017
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