UK PM Exiting Office
Perhaps the final insult for disgraced, and soon to be former, UK PM Boris Johnson, is the reaction we’re seeing in FX markets to news of his resignation. On the back of a sudden wave of cabinet resignations in recent days, Boris Johnson has finally given up and outlined plans to resign from his post as PM later today. The PM will remain in power until Autumn, giving the Conservative party enough time to hold a leadership contest to establish a new party head and PM.
Following months, if not years, of political disarray in the UK, GBP is rallying on news of Johnson’s resignation. Given the political uncertainty which has dogged the Pound over recent months and the confusion around whether Johnson would be able to hang onto his leadership, the market seems to be appreciating some final clarity. The market reaction suggests traders are hopeful that a new UK PM can restore unity and clarity to government, ultimately benefitting the country and the economy at a time when it needs it most.
Technical Views
GBPUSD
For now, GBPUSD is sitting on big support at the 1.1934 level. While still within the bear channel from YTD highs, the focus remains on an eventual break lower towards 1.1474 next. However, bullish divergence in momentum studies is worth noting and, should we see a break of the channel top and 1.2355 level, this might pave the way for a fuller reversal higher.
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With 10 years of experience as a private trader and professional market analyst under his belt, James has carved out an impressive industry reputation. Able to both dissect and explain the key fundamental developments in the market, he communicates their importance and relevance in a succinct and straight forward manner.