GBP/USD: to close bearish gap after terror attack 30 pip sell-off?

Ross J Burland FXStreet

GBP/USD opened the day with a bearish gap following the atrocities of the weekend's terror attack.

London Bridge terror attack: safe havens and ongoing terrorism

GBP/USD made a low of 1.2851 from the previous close of 1.2888 and is down -0.15% at the time of writing. The pound will be the centre of attention this week with the UK elections still scheduled for 8th June, despite the latest terror incident that took place in London. This is the third incident this year alone that include the Westminster attack and Manchester's.

See below for the latest polls and a guide to trading the elections with three possible scenarios fo the pound depending on the results:

ICM poll puts UK PM May's Conservatives on 45% vs. Labour on 34% ahead of elections

Meanwhile, analysts at Brown Brothers Harriman (BBH) noted that Sterling was range-bound last week, between 1.2770 and 1.2920. "The outside up day posted in the middle of the week did not see follow-through buying, but rather back-to-back inside days."

GBP/USD levels

The pound dropped 30 pips to 1.2851 with work to do still to close the gap at 1.2888. Support levels are positioned at 1.2840, 1.2800 and 1.2760 while resistance levels are located at 1.2920, 1.2960 and 1.3000.

The analysts at BBH argued that the technical indicators look constructive, but explained that this may be a reflection of a heavy dollar. "The $1.3000-$1.3055 needs to be overcome to be anything technically," they said.

GBP/USD 4hr chart

Valeria Bednarik, chief analyst at FXStreet explained that in the 4 hours chart, the price has been holding above a horizontal 200 EMA at 1.2840, and now stands above a modestly bullish 20 SMA. " The Momentum indicator heads south around its 100 level whilst the RSI stands at 54, diverging from each other, and therefore failing to provide clues on what's next for the pair," she explained.

Author

Ross J Burland

FXStreet

Ross J Burland, born in England, UK, is a sportsman at heart. He played Rugby and Judo for his county, Kent and the South East of England Rugby team.

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