Ongoing political uncertainty rocks the British pound
The British pound fell across the board this week over ongoing political uncertainty in the United Kingdom and fears over the results of the European election. Speculation mounted that British PM Theresa May could be forced out of her position as Conservative party leader as her new Brexit plan failed to win support from key cabinet members. The British pound suffered its worse ever losing streak against the euro currency and also slumped to a four-month trading low against the US dollar. Traders and investors fear the prospect of a no-deal Brexit and the current damage that political uncertainty is causing the United Kingdom economy.
∙ The GBPUSD pair is bearish while trading below the 1.2770 level, key support is found at the 1.2600 and 1.2500 levels.
∙ If the GBPUSD pair trades above the 1.2770 level, key resistance is found at the 1.2815 and 1.2890 levels.
The US dollar index continued to strengthen this week as investors embraced the Federal Reserve’s neutral policy stance towards interest rates. The release of the FOMC meeting minutes showed that policymakers remained neutral towards rates, which helped to erode fears that the United States economy may have cut interest rates as the economy starts to slow. The latest FOMC minutes did not take into account the effects to the US economy from the latest round of trade tariffs from the Chinese government on selected US goods, which was a recent countermeasure to the Trump administration imposing new trade tariffs on China.
∙ The USDJPY pair is bearish while trading below the 110.00 level, key support is found at the 109.00 and 108.40 levels.
∙ If the USDJPY pair trades above the 110.00 level, buyers may test towards the 110.30 and 110.60 resistance levels.
The euro traded lower against the greenback this week after European manufacturing data for the month of May came in weaker than expected. Official eurozone PMI manufacturing data came in worse than expected, marking another worrying monthly decline and further heightening the prospects of upcoming economic stimulus from the ECB next month. The euro currency also traded on the backfoot against the Japanese yen currency over fears about the results of the weekend’s European election, where a number of new EU populists parties could gain seats in the European Parliament.
∙ The EURUSD pair is bearish while trading below the 1.1190 level, key support is found at the 1.1060 and 1.1000 levels.
∙ If the EURUSD pair trades above the 1.1190 level, buyers may test towards the 1.1265 and 1.1300 resistance levels.
Crypto market pause
The broader cryptocurrency consolidated recent trading gains this week as bulls failed to rally the leading digital assets to new monthly trading highs. Bitcoin struggled to overcome the $8,000 resistance level after staging an impressive recovery from the $6,500 level in early week trade. Ethereum also struggled to make gains above the $250.00 level, with the second largest crypto trading in an increasingly narrow range. Litecoin failed to make headway above the $90.00 level, although LTCUSD bulls managed to keep the popular cryptocurrency above major weekly support.
∙ The BTCUSD pair is bullish while trading above the $7,600 level, key resistance is found at the $8,400 and $9,000 levels.
∙ If the BTCUSD pair trades below the $7,600 level, key support is located at the $7,100 and $6,500 levels.