Theresa May surprised many by calling for a snap election for June 8. UK Prime Minister stated that her reason in doing so was to strengthen her hand in Brexit negotiations. At the time that the snap election had being called, the Conservatives had a major lead in the opinion polls. The risk surrounding the election was relatively low, with the Conservative party increasing their current majority by 75-125 seats, would make it easier for May in negotiating the Brexit conditions. However, a substantial shift in the polls has been observed since the release of manifestos, moving in favour of the Labour party.
Of six polls published on Wednesday, two showed the Conservatives widening their lead over Labur, two showed a narrowing and two were unchanged. They mostly suggested that Theresa May would increase the small majority.
The outcome of vote, which is underway and will continue through to 22:00pm, will likely affect all pairs related to pound. Let’s have a look at charts for some key levels regarding GBP.
GBPUSD holds well daily upward trend line. The closets support resides between 1.2799 and 1.2724 area. On the upside, major resistance is located between 1.3230 and 1.3457. A substantial move to the upside is expected only when the Conservatives increase their majority over 50 sets. If the Conservative party win a slim majority this could met with selling pressure as this scenario is largely priced in. Source: xStation5
EURGBP recently bounced of a strong resistance located between 0.8764 and 0.8857 and this pair is trading below upward trend line at the moment. This situation favours sellers on this cross with potential to reach 0.8513-0.8460 in the longer term. Source: xStation5
GBPJPY currently is testing demand zone between 141.58 and 140.11 levels. This also supports GBP buyers with potential to reach even 146.84 level in the longer run. Source: xStation5