It has been a profitable trading day for sterling bears and so we were able to benefit from the fall in the pound while our short trade has hit all profit targets. The pound slid to a low of 1.2638 on political uncertainty following last week’s snap election.
The most important piece of U.K. data will be the Consumer Price report scheduled for release at 8:30 UTC. CPI data is expected to print 2.7 percent in May, unchanged from the prior month. A disappointing CPI figure could however increase the pressure on the pound.
Watch out for higher resistances. From a technical perspective, there could be an upper barrier at around 1.2730/40, a level from where sellers may take the opportunity to sell pounds. If that barrier proves correct, we will shift our focus to the 1.2635-mark. A break of that support level may result in a steeper slide towards 1.2530.
The euro traded more or less unchanged against the U.S. dollar on Monday. Germany’s ZEW survey, due for release at 9:00 UTC will draw euro traders’ attention. However, given the euro’s recent sideways trading range, gains might be limited until 1.1270/80.
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