GBP/USD: Vulnerable To Corrections Below 1.4180

Sterling bulls were able to book a good profit Monday with the pound climbing to a high of 1.4158. While one reason for the pound’s strength can be attributed to the relief over Scottish elections, traders should bear in mind that further political clashes over the U.K.’s future might be happening in the months to come. Nicola Sturgeon’s SNP party failed to win an outright majority, but with support from the pro-independence Green party, the SNP would have enough to form a pro-independence majority – a headwind for the pound in the future.

However, what matters at the moment is the U.K. economy and with the country due to be fully re-opened by June 21, more sterling gains are likely. We see a next higher target now at 1.4180 before some correction might be due.

EUR/USD: The euro refrained from a significant dip below 1.2130 and could still head for 1.2250. If the pair falls below 1.2110 it could extend its correction towards the current support around 1.2050.

DAX: The index fell below 15300 and we now focus on lower targets at 15140 and 15100. Below 15080 the index could extend its fall towards 14950. Above 15360 bullish momentum could accelerate.