[GVI Forex 2]

EURGBP at .8507 shows no signs of election jitters.

One thought. The election on July 4 ensures there will be no June rate cut.

[GVI Forex 2]

IF there are UK election jitters, you will likely see it in EURGBP.

[GVI Forex 2]

So far not much of a reaction in GBP but be on alert

Rumours of a snap election are growing in Westminster following the announcement of a possible summer contest.

A Cabinet meeting has senior Conservatives clearing space in their diaries, with some suggesting a reshuffle might instead be in the offing, with Jeremy Hunt’s position as chancellor at risk.

Adding to mounting speculation, the foreign secretary David Cameron has cut his trip to Albania short to attend this afternoon’s urgent meeting expected around 4pm….

Sunak election news – live: PM fails to rule out snap general election ahead of emergency cabinet meeting…Rishi Sunak has been facing months of pressure to press the election button

[GVI Forex 2]

A bit iof a tug-of-war between GBP and EURUSD

EURGBP came within 2 pips of .8502 support.

EURUSD is off its low but upside is limited unless it can regain 1.0843 (yesterday’s low)

[GVI Forex 2]

EURGBP DAILY CHART – MAJOR SUPPORT LOOMS

EURGBP extending its low and while below .8534 (not shown on this chart), risk is to .8502 (suggests .8500 as well) and major support at .8484.

On the upside, would need a move to s.8521 to slow the risk but only above .8534 would negate it.

[Mtl JP]

GVI 8:13
At 1.2728 GBP is now backed off 50% of reaction to earlier inflation stickiness.
—

IF u d like chuckle:

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14 hours ago

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10 hours ago

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6 hours ago

[GVI Forex 2]

GBPCHF WEEKLY CHART – WHAT’S HOT AND NOT?

What’s hot: GBP

What’s Not: CHF

GPBCHF trying for a breakout through the top of a range that has capped the upside since Oct 2022 at 1.1577.

In this regard, it needs to hold above 1.1577 to expose 1.1717 as the next target.

[GVI Forex 2]

UK inflation falls less than expected, dashing June rate cut hopes

See our Economic Calendar

GBPUSD needs to hold above 1.2726 to maintain the breakout.

[GVI Forex 2]

GBPUSD 4-HOUR CHART – LEVELS TO WATCH AFTER THE UK CPI  REPORT

RESISTANCE
1.2726 (no key leveks afdtrer until 1.28+)

SUPPORT
1.2696

1.2642

TRENDLINE

[GVI Forex 2]

The key event overnight will be the release of UK CPI. It comes out before UK markets open and will be a test for GBPUSD’s recent strength.

Click below for a detailed preview.

Newsquawk Week Ahead 20-24th May: Highlights include FOMC minutes; ECB retreat; PBoC, RBNZ, CBRT rate decisions; UK, NZ CPI

Newsquawk Week Ahead 20-24th May: Highlights include FOMC minutes; ECB retreat; PBoC, RBNZ, CBRT rate decisions; UK, NZ CPI

[GVI Forex 2]

GBPUSD: TESTED KEY 1.2726 C RESISTANCE (SCROLL DOWN TO SEE THE HART POSTED EARLIER)

[GVI Forex 2]

EURGBP 4 HOUR CHART – FACING KEY SUPPORT

If the market was concerned about an expected sharp drop in headline UK inflation tomorrow it is showing no signs of it.

You can see by the blue AT laffer lines pointing down that EURGBP is coming in range of key support at .8526.

Key support is at .8484-.8502 below it.

Note one reason why EURUSD has been trading soft and GBPUSD bid are flows in this cross.

[GVI Forex 2]

GBPUSD 1 HOUR CHART – bID DESPITE LOOMING CPI

Logic would normally say GBP should be trading on the soft side ahead of what is forecast to be a sharp drop in CPI to be reported on Wednesday.

So far, this has not been the case but keep this in mind as the day winds on.

Meanwhile, GBPUSD is maintaining its bid while above 1.2696 with 1.2720 guarding key resistance at 1.2726. Above this level, there is a void until 1.28+

[GVI Forex 2]

GBPUSD DAILY CHART – TESTING A KEY RESISTANCE

GBPUSD has tested 1.2708 and as can be seen on this chart is a key resistance.

On the downside (not shown on this chart() a key support is at 1.2643, but 1,27 will likely be the bias setter ahead of a busy week for UK data.

In this regard, CPI will be the highlight, and logic says forecasts for a sharp drop should at some point cap GBPUSD”s upside ahead of it.

See our Economic Calendar

[GVI Forex 2]

According to IG

A majority of IG traders are long US dollar against key currencies like EUR and GBP after soft CPI inflation data led to substantial dollar weakness on Wednesday of last week. In USD/JPY, however, 70% of IG traders with open positions are short as the pair continues to trade above 150.00—not far from historic highs.

 

[GVI Forex 2]

USDX DAILY CHART – WHERE ARE THE FLOWS GOING?

 

While the US Dollar Index (USDX) closed about unchanged, the currency market traded mixed with EURUSD closing about unchanged, GBPUSD higher, and the CHF and JpY weaker. The star of the day was gold.

CLOSE VS PRIOR   % CHANGE
EURUSD    1..0869 VS 1.0865        +.03
USDJPY     155.65 VS 155.414         +.15
GBPUSD    1.2701 VS 1.2672          +.22
USDCAD    1.3615 VS 1.3612          -.02
AUDUSD     6692 VS .6682            +.16
USDCHF    .9092 VS .9061            +.34
XAUUSD     2515 VS 2377             +1.55

Do the math.

GBPJPY was the outperformer with GBPJPY coming in second.

XAUUSD outperformed all currencies with a wide margin and weakness in JpY and CHF suggests there might have been XAUJPY and XAUCHF carry trades involved.

[GVI Forex 2]

GBPCHF WEEKLY CHAART – LOOKING TO BREAKOUT?

I had to go to a weekly chart to put the current price action in perspective.

Clear uptrend

1.1575 is the top of a range that has held since Oct, 2922 so a najor level.

[GVI Forex 2]

GBPCHF 4 HOUR CHART –

GBPUSD is getting a boost out of firmer crosses, including EURGBP (weaker) and GBPCHF leading the pack.

 

[GVI Forex 2]

GBPUSD 4 HOUR CHART – 1.2700 TESTED AGAIN

GBPUSD has been a leader today and re-testing 1.27. The significance of this level is THAT BETOND IT there is a void of key resistance until above 1.28.

[GVI Forex 2]

FWIW EURUSD pops back above 1.0850 (last 1.0853) after EURGBP found support.