GBP/USD Remains Supported
GBP/USD surged higher after UK elections. Sellers have tried to reverse it down, but technicals are keeping it bullish
The GBP surged higher after the conservatives won a strong majority in the British Parliament last Thursday. GBP/USD climbed nearly 500 pips, breaking above the big round level at 1.35. I said before the elections that this level was going to be the first target for the buyers.
That was the first target indeed, as this pair has retraced lower from there. The reason for the surge was the clarity of the direction that the UK will be heading now, after Tories got all the votes they need in the parliament now. But, that will also mean Brexit will happen pretty soon, so anything can happen – the UK can end up with no trade deal by the end of next year, when the real Brexit deadline is.
So, GBP/USD retraced lower on Friday, but it reversed higher again above the 1.33 level, which seems to have formed a support zone around it. Today, we saw another pullback lower, but that support zone held again, aided by the 50 SMA (yellow) on the H1 chart this time.
The price bounced off that moving average, so buyers still remain in control in this pair. We missed the chance to go long from the 50 SMA earlier, but will keep following the price action to see if we can get another opportunity.
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