What does this mean for the British pound? Investors like Johnson’s pro-business agenda, so a majority victory would likely lift the pound. If Johnson is faced with a minority government or Corbyn wins in an upset, I would expect the pound to face significant downward pressure. Whatever the outcome, we could see volatility from GBP/USD when the first results are released after the polls close (22:00 GMT.)
Technical Analysis
GBP/USD showed some upward movement on Wednesday and tested the 1.32 line, which remains fluid on Thursday. Above, there is support at 1.3260, which was last tested in early March. On the downside, the round number of 1.3100 has some breathing room in support, with GBP/USD moving higher.
Pacific Currencies – Summary
USD/CNY
USD/CNY is down slightly in Thursday trade. The pair is currently at 7.0307, up 0.11% on the day. The yuan remains close to 7.0400, which is an immediate resistance line. If the pair can break above this line, it has room to make strong gains, with the next resistance line at 7.0480.
AUD/USD
AUD/USD is trading at 0.6883, up 0.11% on the day. The pair climbed close to 1.0% on Wednesday, as the Aussie hit a 1-month high. There was positive economic news on Thursday, as the Melbourne Institute Inflation Expectations index gained 4.0% for a second straight month. This is an important inflation indicator, as inflation expectations often translate into actual inflation figures.
NZD/USD
NZD/USD followed the Australian dollar on Wednesday and made considerable gains. Currently, the pair is trading at 0.6584, up 0.05% on the day. There are no New Zealand events on the schedule, so I expect the pair to remain steady for the remainder of the day.