Thursday ended with the EUR/USD being high above of local resistance of 1.10. What's the target now?
British election upset suppresses sterling
On Friday, the British pound sank steeply right after British Prime Minister Theresa May's Conservative Party suddenly fell short of an expected majority in the country’s general election.
The British pound sank 1.5%, being worth $1.2764, having tumbled to $1.2693, losing 2%, thus demonstrating the weakest outcome since April 18.
According to an updated BBC forecast, May's Conservatives would grasp 318 of the 650 seats, which is eight short of a majority. Meanwhile, Corbyn's left-wing Labour was expected to win 267 and it would result in a so-called "hung parliament" a pure deadlock.
Such a shocking outcome was supposed to bring domestic politics into turmoil and also affect the nature of Brexit negotiations.
However, reactions in other key currencies, including the common currency, greenback and yen, were quite moderate.
The major US bank ends a two-day gathering on Wednesday. It’s widely expected to lift interest rates. Investors are eager to know whether it would welcome further monetary tightening in the nearer months or not.
The Reserve Bank of Australia will publish its statement and announce the interest rate on July 7, at 7:30 MT time.
The overall market sentiment was mixed after the USA recorded the largest increase in virus cases since May 9. The data even offset the better-than-expected NFP.
The risk-on tone is back on the market again. Let’s look at main trading opportunities.