The British pound jumped significantly higher in yesterdays trading session and is trying to continue that trend today on the back of a deal reached between the Conservitive party and the DUP party to form a new government in the UK.
The currency is now around a critical resistance level against the US dollar at $1.2815 (formerly a support level) and it has managed to break through this level in the Asian session and we believe it may struggle to remain above there and a pullback is immenenet .
Overall we expect the pound to trade within a tight trading range over the next week or so and depending on the outcome of the political agreement, it could try to make a break for the $1.30 mark as it did a few weeks ago.
There is a good support level at $127.40 so at the moment there isn’t a huge amount of risk for long trading positions
To sum up, expect the British currency to trade sideways for quite sometime before continuing its uptrend once all the political dust has settled.
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Risk warning: CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 66% of retail investor accounts lose money when trading CFDs with this broker. Before deciding to trade foreign exchange you should consider whether you understand how CFDs work, your investment objectives, your level of experience and readiness of taking risk. The possibility exists that you could sustain a loss of some or of all of your initial investments and therefore you should not risk more than you are prepared to lose. Please seek independent financial advice if necessary.
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