The political uncertainty regarding the upcoming elections are making him feel, all their weight on the pound. The british currency is going through a period of instability, from the moment that the victory of May is not so predictable as some time ago. The latest polls, see in fact reduced the advantage of the conservatives in the May on the labour party, after the duel on television against the other leader Jeremy Corbyn.

The political risk ballast sterling

sterlinaA few days ago the sterling is struggling. If before you could think of a simple retracement after the large leaps made in April, is now no more. The scenario seems to be changed. No longer temporary and physiological, there is something more below. In the last week, sterling weakened against the euro and against the dollar, american (see here instead of the forecast eur usd 2017). May had asked for early elections to strengthen the weight of the conservatives, but this move threatens to backfire against her. This would bring inevitable consequences for the negotiations on the Brexit.

The strong risk of finding yourself with a Parliament split in two, and the need to arrive at a coalition government. Not exactly the best to go to discuss a transition, like what is Brexit. And this would weigh heavily on the pound.

Technical analysis

From the technical point of view, the pound could walk along a strong path bearish in view of the elections. This applies both against the euro against the u.s. dollar. Recently the exchange rate pound-dollar broke the support at an altitude 1,2831. It also provides for a return of the quotation on the next support zone in the area 1,2674 (use also thestochastic oscillator trading).

A similar situation is true for the cross, euro-sterling, because the trend is oriented upwards. Here it is to be kept an eye on the level of resistance to share 0,8735, because its breaking would open the way to the achievement of the area 0,8788 and later 0,8857.

The article Sterling in trouble in the Forex, weighing the political risk of the elections seems to be the first on Businessannunci.it.