October 24, 2022

New UK PM, New Fundamentals

Michael J. Donoghue
New UK PM, New Fundamentals

The next Prime Minister of the United Kingdom has been decided: Rishi Sunak, former Chancellor of the Exchequer in Boris Johnson’s administration, has won the ruling Conservative Party’s leadership election by default. Having previously sounded the alarm against Liz Truss’ debt-financed tax cuts while running against her in the last leadership race, his efforts to avoid such fiscal stimulus amid historic inflation rates proved prescient. The Pound jumped in value accordingly upon the news of his win; financial markets appear to be hoping that with the new UK PM, new fundamentals will follow.

Is GBP Bearish Momentum Over?

It seems plausible that GBP could experience increased buying pressure over the short term, particularly in response to a PM that veers away from money-printing during high inflation. However, the core problems plaguing the Pound and the British economy remain regardless: a timidly hawkish Bank of England, the looming energy crisis, messy trade, and impending stagflation are not things that a new PM can fix single-handedly. In terms of fundamentals, it currently seems more likely that the GBP bearish trend will ultimately continue, perhaps even falling below parity with USD.

Best Pairs to Watch

For those interested in shorting the Pound, there are no pairs currently ranked favorably for GBP bears by the EdgeFinder, A1 Trading’s handy market scanner; this is fitting, considering the likelihood of GBP finding short-term bullishness. However, if GBP bearishness continues upon encountering fresh resistance, the following two neutral pairs currently lean less in the Pound’s favor, which traders can consider for the future. They are listed below with their respective ratings, signals/biases, and corresponding charts.

1) GBP/USD (Receives a -2, or ‘Neutral’ Signal)

New UK PM, New Fundamentals
New UK PM, New Fundamentals

2) GBP/NZD (Receives a -2, or ‘Neutral’ Signal)

New UK PM, New Fundamentals
New UK PM, New Fundamentals

A1 Edgefinder

Watchlist
Save time looking for setups with the EdgeFinder's watchlist! In a glance, see the EdgeFinder's current top buys and top sells.

10% off code: 'READER'

Access Now

Free

Trading Plan Template
Struggling to build a successful trading plan? Download our template to get started today!
Download
Smart Money Likes USD and Gold

As of 9:10 am EST, the 10-Year bond rate is up ~3.50% while the dollar index remains flat. Some big news coming up in the next 24 hours for the USD, EUR and AUD. US consumer confidence is expected to fall from the last reading. We received a strange signal from the EdgeFinder that could […]

Read More
Why Gold Is Going Over $2000

This week, we have seen a lot of market swings in sentiment along with uncertainty around economic stability. Because of this mixed mindset, investors have been shifting their interest towards gold. This article will cover why gold could continue to move higher. Medium to high impact news is coming up for all currencies such as […]

Read More
Major Moves Ahead For USD

There are some major news ahead for the EUR, CAD, AUD and USD pairs this week. Wednesday will be another Fed rate decision forecasted to be another 25 bp. Here are some events set to come out tomorrow: EdgeFinder Analysis UC is still the EdgeFinder's favorite buy score along with USDZAR at +7. Retail is […]

Read More
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
Home
Edgefinder
VIP
Menu
homesmartphonelaptopmenu linkedin facebook pinterest youtube rss twitter instagram facebook-blank rss-blank linkedin-blank pinterest youtube twitter instagram