The pound sterling is reacting with high volatility to fresh opinion polls ahead of the June 8 U.K. general election. After rallying towards 1.29, the pound dropped sharply as a poll showed Theresa May’s Conservative Party may miss a majority. With sterling’s direction being determined by opinion polls, the technical outlook currently seems to recede into the background. For sterling traders, Tuesday has been a profitable trading day with our long entry hitting the profit target exactly before the pound reversed towards lower levels. If the GBP/USD drops below 1.2790 there could be a next barrier at 1.2750 which needs to be significantly broken in order to spark fresh bearish momentum. On the topside, we still expect a crucial resistance at 1.2980.
For euro traders, the upward trend proved successful with the euro testing the 1.12-mark. From a technical perspective, the euro seems to be formatting a downward channel with the lower barrier currently coming in around 1.11 while the upper barrier, which is currently seen at 1.12, may limit near-term gains in the EUR/USD.
The euro-area’s preliminary headline inflation rate will be released today at 9:00 UTC and the euro might come under some selling pressure ahead of this report as economists forecast a slightly lower reading.
From the U.S., we have Pending Home Sales at 14:00 UTC and the Fed’s Beige Book at 18:00 UTC scheduled for release.
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