A1 Trading Company

October 24, 2022

New UK PM, New Fundamentals

Michael J. Donoghue
New UK PM, New Fundamentals

The next Prime Minister of the United Kingdom has been decided: Rishi Sunak, former Chancellor of the Exchequer in Boris Johnson’s administration, has won the ruling Conservative Party’s leadership election by default. Having previously sounded the alarm against Liz Truss’ debt-financed tax cuts while running against her in the last leadership race, his efforts to avoid such fiscal stimulus amid historic inflation rates proved prescient. The Pound jumped in value accordingly upon the news of his win; financial markets appear to be hoping that with the new UK PM, new fundamentals will follow.

Is GBP Bearish Momentum Over?

It seems plausible that GBP could experience increased buying pressure over the short term, particularly in response to a PM that veers away from money-printing during high inflation. However, the core problems plaguing the Pound and the British economy remain regardless: a timidly hawkish Bank of England, the looming energy crisis, messy trade, and impending stagflation are not things that a new PM can fix single-handedly. In terms of fundamentals, it currently seems more likely that the GBP bearish trend will ultimately continue, perhaps even falling below parity with USD.

Best Pairs to Watch

For those interested in shorting the Pound, there are no pairs currently ranked favorably for GBP bears by the EdgeFinder, A1 Trading’s handy market scanner; this is fitting, considering the likelihood of GBP finding short-term bullishness. However, if GBP bearishness continues upon encountering fresh resistance, the following two neutral pairs currently lean less in the Pound’s favor, which traders can consider for the future. They are listed below with their respective ratings, signals/biases, and corresponding charts.

1) GBP/USD (Receives a -2, or ‘Neutral’ Signal)

New UK PM, New Fundamentals
New UK PM, New Fundamentals

2) GBP/NZD (Receives a -2, or ‘Neutral’ Signal)

New UK PM, New Fundamentals
New UK PM, New Fundamentals

A1 Edgefinder

All-In-One Fundamental Dashboard!
Simplify your fundamental analysis with our all-in-one fundamental dashboard! 
Discount code: READER

Learn more

Will Big Tech Earnings Save Indices?

This week is full of earnings from big tech as we wait for Google, Microsoft, Meta, and Tesla. This month has been mostly in the red and are coming off a 6-day losing streak in the S&P. With tensions in the Middle East escalated, earnings hopes to save the markets. EdgeFinder Analysis Silver sits at […]

Read More
The Shift is Finally Here

Indices continue to hurt as the US economy points further towards higher inflation this year. The Fed now has to decide whether or not it is worth cutting rates so soon. And if rate cuts are off the table, the sentiment shift might have redirected back to risk-off. EdgeFinder Analysis GU is one of the […]

Read More
Dollar Remains Strong

Indices recover from Friday's lows as the dollar index hovers at break even. The mounting tensions in Israel-Iran escalated market worries, but financial earnings have kicked off to a good start. EdgeFinder Analysis Retail Sales came in higher than expected which is a good sign for the economy. It's also strong for the USD as […]

Read More
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
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-phonemenumenu-circle linkedin facebook pinterest youtube rss twitter instagram facebook-blank rss-blank linkedin-blank pinterest youtube twitter instagram