A Quick Look At GBPUSD And EURGBP After The Pound's Exit Poll Collapse
Axi | Jun 09, 2017 12:54
Originally published by AxiTrader
Well hats off to You Gov.
It looks like the new polling method that resulted in a prediction that Theresa May's Conservative party would lose seats at the election is set to be proved right after this morning's release of the Exit Poll showed just that.
The prediction that the Conservatives will end up short of the majority needed of 326 seats in the Commons with just 314 seats sent the pound sharply lower when it was released at 7am AEST this morning.
Sitting at 1.2940/50 just before the result GBP has traded down to a low of 1.2709 - it's at 1.2747 now for a loss of 1.55% since 7am. Against the euro it is a similar story with EUR/GBP at 0.8786, up 1.55%.
An Exit Poll is just that - it's a predictive poll of the outcome.
Antony Green - the ABC's excellent election watcher who is in the UK at the moment - tweeted that in 2015 the Exit poll underestimated the Conservative vote by 15 seats which, if replicated, would deliver Mrs may a one or two seat majority.
Naturally, a one or two seat majority is not the strongest grasp on power. But with the Liberal Democrats ruling out a coalition it makes forming government much easier.
As it stands we'll have to wait for the results to come in to either confirm or deny the Exit poll. The first result - Newcastle Central - was held by Labour with both its and the Conservative's vote rising while UKIP's collapsed.
The big flow of results today in Australia will flow between 11am and 2.30pm by which time we'll know the result.
In the meantime here's a look at the key levels on the charts:
h2 GBP/USD/h2
We've already taken out support at 1.2810 and GBP/USD is currently trading at 1.2746 with the low at 1.2706 this morning just ahead of the 1.2680/90 support. The next level of support should that break is 1.2578 which is the 50% level of the move and the 200-day moving average.
On the topside the levels are 1.2950 and then a huge level at 1.3040/60.
/h2
Get The App
EUR/GBP has risen toward the top of the 2017 range with a high this morning around 0.8825.
0.8850 marks the high of late 2016 and looks like formidable resistance. A break would, however, open up the chance of a move toward 0.9000/9050.
On the downside - should sterling recover - support is at 0.8760/70, where it is now, and then 0.8640/50 and then 0.88580/0.8600.
There are many results to flow, and much water to move under the bridge in the hours ahead. It could be a time of continued volatility. And it is a time to monitor positions closely.
Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.