A1 Trading

How Will Pound React To Johnson's Resignation?

July 7, 2022
Frank Cabibi

UK Prime Minister, Boris Johnson submitted his resignation this morning as well as several cabinet members. Both the pound and the equities market flew higher in response to this drastic change. Heavy uncertainty resides in these markets still, and bleakness on England's economy continues to put pressure on the pound.

Post-Resignation Pound

Boris Johnson's leave may dullen the sentiment on the pound further down the road as the rampant inflationary conditions caused by quantitative easing policies are taking its toll on the currency. Higher borrowing costs were meant to help quell that issue, but CPI refuses to yield.

resignation
GDP MoM

The former Prime Minister arguably couldn't have left at a worse time monetarily-wise, especially as monthly GDP numbers continue to come in lower and lower since the beginning of 2022. If this trend continues, the pound's performance will likely get worse during the third quarter.

UK's services sector took another dip this month after PMI data fell to a two year low. The services sector makes up of 72% of England's output, so a further decline will keep hurting overall growth.

Trade Setups

GBP/USD

resignation

GU flies higher today after Prime Minister Boris Johnson resigned and added a new level of uncertainty around the economy's outlook while waiting for a new Prime Minister. Price is also coming up with higher risk sentiment as it nears the highs of the day. Resistance lies around the 1.21500s after bouncing up from a lower low. The overall down trend on this pair suggests that this quick pop could result in another short setup.

EUR/GBP

resignation

EURGBP came down hard today as price enters a clean support zone. The pair was in a steady uptrend while this retracement looks like it could be a buy setup on the 1D timeframe. Price came down into the 61.8% fib level paired with a support level around the 0.84500s.

GBP/CAD

resignation

This pair might see some bullishness in the short run after bouncing from previous support and forming a double bottom on the 4H timeframe. A move higher to resistance on the falling trend line could be a short setup on this pair since the overall trend is still downward. A break under the double bottom could mean another drop towards 2013 lows in the 1.5200s.

The EdgeFinder

All-in-one Fundamental Dashboard

30 Days Access

Free Telegram

Join for daily analysis and trade setups!

Join Telegram

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
Signals

A1 Trading Company

A1 Trading is a leading financial analysis and trading education company dedicated to empowering traders of all levels. Our team combines extensive market knowledge with cutting-edge technology to provide valuable insights and tools for traders worldwide.
2024 All Rights Reserved | A1 Trading Company
There is a significant degree of risk involved in trading securities. With respect to foreign exchange trading, there is considerable risk exposure, including but not limited to, leverage, creditworthiness, limited regulatory protection and market volatility that may substantially affect the price, or liquidity of a currency or currency pair. CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. The vast majority of retail client accounts lose money when trading in CFDs. You should consider whether you can afford to take the high risk of losing your money.
homesmartphonelaptop-phonecross-circle linkedin facebook pinterest youtube rss twitter instagram facebook-blank rss-blank linkedin-blank pinterest youtube twitter instagram