Today is the day of the complete defeat of the bulls who bought the pound sterling after the news on the results of the parliamentary elections in UK. Of course, our readers were aware of this potential development, and we hope they have saved their money from getting hit by the stops.
Chart of the Day – GBP/USD
Summary of previous episodes. The pound rose three weeks in a row before the vote. The idea was simple and clear. Boris Johnson’s party wins the election. Then leave the EU before the new year. The main thing is that the country could finally get certainty, and it was a powerful benefit for the pound.
The election exceeded the Conservatives’ wildest expectations. An instant spurt of 3 figures followed and a symbolic withdrawal of stops just above the round mark of 1.35. What happened next? Then exactly what we predicted happened. The euphoria of the election was 100% overpriced.
And it’s been replaced by reflection on the future of Britain after Brexit. And they are extremely indifferent. It was on these thoughts that the pound of sterling rolled down. Moreover, today’s closing of long positions resulted in the pair falling even below the level observed just before the elections.
The next few days the market is expected to be highly volatile, which means that speculators get an excellent opportunity to earn money.
It’s very interesting to find out where the money from the pound’s sale went. If you think that this was a traditional euro (as the nearest European competitor), then this time you are wrong. The main beneficiary of the sale was the Swiss franc. In recent days, it has already grown sufficiently against the major world currencies, and today it has shown new highs against the U.S. dollar over the past 3.5 months.
And this is even though the world stock indices are in the area of historical highs. Theoretically, the latter means that investors, on the contrary, should sell the Swiss franc massively, entering the risky assets. However, this time everything is different. Does anyone know anything?
What awaits us today?
09.30 Speech by ECB Head Christine Lagarde
10.30 UK Consumer Price Index for November
14.30 UK Consumer Price Index for November
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