After reaching its highest range in early May amid hopes of a swift arrangement between both leading parties Conservatives and Labor, it appears that the British pound loses sight. Nervousness over upcoming EU parliamentary elections is felt, as recent polls are favoring Nigel Farage’s newly formed Brexit party with a majority of 34% while both historical leading parties are ranked second (Labor party: 21%) and fourth (Tories: 11%), alongside with pro-EU Liberal Democrats (12%), thus rising risk of a potential disorderly Brexit looking forward. Yet the UK is certainly not an isolated case where we should see unconventional parties taking the lead (i.e. Italy, Austria, France, Germany, Denmark or Finland, not to mention others).

There is therefore good reasons to consider downside risk for GBP as a hard Brexit would have extreme consequences on the currency. Furthermore, the recent labor data releases are not particularly rejoicing. Despite an unemployment rate of 3.80% in March, lowest since 1974, wage growth of 3.20% (prior: 3.40%) shows signs of weakness while the monthly staff demand index from Recruitment and Employment Confederation and accountants points to 53.6 (prior: 55.5) in March, its lowest level since August 2012, suggesting that the robust labor market is losing pace.


Stay on top of the markets with Swissquote’s News & Analysis


We would therefore favor a GBP bearish bias. GBP/USD lost -2.55% since its high from 3 May 2019 (1.3173). The pair is approaching support at 1.2803 (14 February 2019 low).

This report has been prepared by AC Markets and is solely been published for informational purposes and is not to be construed as a solicitation or an offer to buy or sell any currency or any other financial instrument. Views expressed in this report may be subject to change without prior notice and may differ or be contrary to opinions expressed by AC Markets personnel at any given time. ACM is under no obligation to update or keep current the information herein, the report should not be regarded by recipients as a substitute for the exercise of their own judgment.

Analysis feed

FXStreet Trading Signals now available!

Access to real-time signals, community and guidance now!


Latest Forex Analysis

Editors’ Picks

EUR/USD is pressured under 1.09 amid upbeat German data

EUR/USD is trading below 1.09 as ongoing SIno-American tensions boost the safe-haven US dollar. The German IFO figures for May beat expectations with 79.5 points in May. Coronavirus figures in Europe are declining.

EUR/USD News

GBP/USD is trading below 1.22 amid negative rates speculation

GBP/USD is trading below 1.22, as investors continue speculating about the BOE setting negative rates. PM Johnson is under pressure after his senior adviser violated the lockdown. The UK is on a bank holiday today.

GBP/USD News

Forex Today: Dollar in demand amid high Sino-American tensions, thin liquidity expected

The new week has kicked off with dollar strength as the US and China have kept tensions high. Thin liquidity and potential erratic movements may occur as the United States and United Kingdom are on holiday.

Read more

Gold trades with modest losses, holds above $1722 support zone

Gold met with some fresh supply on Monday, albeit lacked any strong follow-through selling and was last seen trading with only modest losses, just below $1730 level.

Gold News

USD/JPY clings to gains near 50-day SMA, bulls await a move beyond 108.00 mark

USD/JPY regains some positive traction on Monday amid a positive mood around equity markets. Concerns about worsening US-China tensions seemed to be the only factor capping further gains. Sustained move beyond 50-day SMA, 108.00 mark needed to confirm any near-term bullish bias.

USD/JPY News

Forex Majors

Cryptocurrencies

Signatures