Thursday, May 22, 2014

Elections dominate | Pound still waits for a new impetus

Here in Ireland we enjoy few things better than a good election campaign and the rash of candidates’ posters that has sprung up in the cities and towns is good evidence of this. We have two today – one for local authority members and the other to elect the representatives we will send to the European parliament.

There is no real evidence that the European elections will have any major impact on currency exchange rates but there is another election taking place this coming Sunday that has the effect, even now, of reining in the appetite for risk among investors. This is the election for a new president of Ukraine, to replace the ousted former holder of that office, Victor Yanukovych. Gold, in particular, has been held at an elevated level largely because of the Ukraine tensions. Recent violent clashes between government forces and those of the breakaway opposition, resulting in deaths, have only served to raise the temperature.

 Pound still waits for a new impetus

There are many reasons to be long the GBPUSD pair but it stubbornly refuses to budge from its position below resistance at 1.69. A recent short burst to the upside has been completely reversed and we now await a visit of price to the region at the bottom of the upward channel, seen on the chart above before we enter a new position.

One thing is sure: We will not be going short on this pair.

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