GBPUSD Analysis for Regulated Binary Options Brokers
Political limbo to persist!
The UK general election is now two weeks behind us and the Pound is yet to find a clear direction while volatility remains high, note Binary Options Brokers. Surprisingly, last week’s Bank of England meeting showed a division within the central bank as MPC members voted without a consensus to keep rates on hold. Sterling surged on the day in response, only to have Governor Mark Carney erase the gains earlier this week by saying that now is not the time to raise rates.
And indeed, it seems that Brexit is finally starting to bite the UK economy. Falling real wages due to rising inflation is the primary concern for UK policymakers and it was the main reason for the division in the MPC vote last week.
With Brexit negotiations now underway, politics will likely continue to trump economics for a little longer. British Prime Minister Theresa May is yet to form a government after the fiasco in the election which she expected to win with a majority.
Headlines related to Brexit negotiations are now set to be the dominant factor for the GBPUSD exchange rate. As such, uncertainty is high making spot Forex trading an even higher risk activity.
Traders can protect themselves by trading the GBPUSD with a regulated binary Options Brokers instead. Binary options offer a way to bet on currency exchange rates with a fixed predetermined risk making in more suitable for highly volatile times.
The GBPUSD pair is now at a significant resistance around the 1.26 handle. This area coincides with an important previous top and multiple Fibonacci retracement levels, suggest regulated Binary Options Brokers.
If the pair slips below 1.26, the next support down is in the 1.2350 – 1.2450 area which coincides with the broken trendline from April. The 1.20 area is a major bottom and could be retested if Brexit negotiations hit a dead end at some point.
In a bullish scenario, 1.30 and 1.3125 will be resistance to the upside.
Due to the expected high volatility in the pair, it’s probably best to stick with simple technical support and resistance levels.
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Your capital may be at risk. This material is not investment advice
I've been a professional trader for over 5 years.
Currently I work as forex analyst for different investment companies.
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