Political Uncertainty Dragging On Sterling Pairs Despite Queen's Speech Jump
|The widely publicised turmoil in UK politics is causing a massive issue for the pound and is hitting all Sterling pairs at the moment with many trading through big technical levels. The recent headlines out of the Downing Street showed that DUP representatives have been surprised at the lack of negotiating experience, they also stated that they felt taken for granted in negotiations. These headlines do not bode well for the UK as we go into Brexit negotiations with the EU.
However well the negotiations are going with the DUP, we still went into today’s Queen’s Speech without a fully functioning government in place. The Queen’s speech itself had 27 bills in total a number of which were related to Brexit, however the speech painted a grim, complicated and overall confused picture of what is Theresa May’s rather disjointed vision of Britain. However Theresa May is increasingly looking like a woman losing her grip of not only her premiership, but the support of her party and the people that voted for her.
GBPJPY is an interesting chart at the moment having bounced off of the key downside levels most notably the trendline and 139.82. Comment from BoE Member Haldane has also seen this upside increased as more Hawkish comments have been unearthed showing very much a split MPC committee.
The moves higher has confirmed the importance of the downside trendline bounce at 139.82 and brings the upside resistance at 142.77 into play. It also shows the fact that the 100 day SMA is sitting at current prices at 141.18. This was a pretty telegraphed move after the big move to the downside on Tuesday following rumours of comments from the DUP. We could well see a lot more bug swings in Sterling crosses as the week moves on as headline continue from a very challenging political picture in the UK.
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