UK Prime Minister, Boris Johnson submitted his resignation this morning as well as several cabinet members. Both the pound and the equities market flew higher in response to this drastic change. Heavy uncertainty resides in these markets still, and bleakness on England's economy continues to put pressure on the pound.
Boris Johnson's leave may dullen the sentiment on the pound further down the road as the rampant inflationary conditions caused by quantitative easing policies are taking its toll on the currency. Higher borrowing costs were meant to help quell that issue, but CPI refuses to yield.
The former Prime Minister arguably couldn't have left at a worse time monetarily-wise, especially as monthly GDP numbers continue to come in lower and lower since the beginning of 2022. If this trend continues, the pound's performance will likely get worse during the third quarter.
UK's services sector took another dip this month after PMI data fell to a two year low. The services sector makes up of 72% of England's output, so a further decline will keep hurting overall growth.
GU flies higher today after Prime Minister Boris Johnson resigned and added a new level of uncertainty around the economy's outlook while waiting for a new Prime Minister. Price is also coming up with higher risk sentiment as it nears the highs of the day. Resistance lies around the 1.21500s after bouncing up from a lower low. The overall down trend on this pair suggests that this quick pop could result in another short setup.
EURGBP came down hard today as price enters a clean support zone. The pair was in a steady uptrend while this retracement looks like it could be a buy setup on the 1D timeframe. Price came down into the 61.8% fib level paired with a support level around the 0.84500s.
This pair might see some bullishness in the short run after bouncing from previous support and forming a double bottom on the 4H timeframe. A move higher to resistance on the falling trend line could be a short setup on this pair since the overall trend is still downward. A break under the double bottom could mean another drop towards 2013 lows in the 1.5200s.
On Friday this past week, the United Kingdom’s Office for National Statistics released the latest reports on the UK’s Gross Domestic Product (GDP), a means of measuring economic output. It was revealed that their economy grew by -0.6% month-over-month, and -0.1% quarter-over-quarter, which entails a contraction for both timeframes. Although these numbers are less disastrous […]
This week the public received startling news: on Wednesday morning, month-over-month CPI (a proxy for inflation) in the United States had unexpectedly remained static, clocking in at 0% whereas a moderate 0.2% increase had been forecast. Core CPI (which excludes food and energy prices) likewise came in lower than anticipated at 0.3% month-over-month, while Thursday […]
Next Tuesday, the RBNZ will announce their new official bank rate which is expected to be 3%, a 0.50% rise from July. This hike will make it the highest yielding major currency on the market. Here is why you should consider buying the kiwi before Tuesday's decision as well as some strong NZD long setups. […]
DISCLAIMER: All comments made by TraderNick’s Forex Group, LLC are for educational and informational purposes only. All comments should not be construed as investment advice regarding the purchase or sale of any securities or financial instrument of any kind. Please consult with your financial adviser before making an investment decision regarding any securities or financial instruments mentioned by TraderNick’s Forex Group, LLC. TraderNick’s Forex Group, LLC assumes no responsibility for your trading and investment results. All information on any of the platforms utilized by TraderNick’s Forex Group, LLC was obtained from sources believed to be reliable, but we do not warrant its completeness or accuracy, or warrant any results from the use of the information. TraderNick’s Forex Group, LLC, its employees, representatives, and affiliated individuals may have a position or effect transactions in the securities and financial instruments herein and or otherwise employ trading strategies that may be consistent or inconsistent with the provided strategies. Trading of any type involves very high risk and may not be suitable for all investors. TraderNick’s Forex Group, LLC, its subsidiaries and all affiliated individuals assume no responsibility for your trading and investment result. Read our full disclaimer here