GBP/USD still looks to be trending higher even though Arlene Foster will step down as leader of Northern Ireland’s Democratic Unionist Party on May 28 and as First Minister of Northern Ireland at the end of June after a revolt by the DUP’s Stormont Assembly Members and Westminster Members of Parliament.
The next election for the Assembly is not due until May next year but, in the meantime, Deputy First Minister Michelle O’Neill of the opposition Sinn Féin party is likely to demand changes before agreeing to continue sharing power with the DUP. While Sinn Féin is a Republican party and the DUP favours remaining in the UK, the two have been working together and increased tensions between them would add to the political risk for GBP/USD bulls.
From a technical analyst perspective, the outlook for EUR/USD rates appears relatively mixed, as price struggles to penetrate range resistance at 1.2170 – 1.2190.
The premature formation of a Shooting Star candle could inspire sellers in the near term and generate a pullback to key support at 1.2080, with a break below probably garnering follow-through and bringing the 1.2000 handles into the crosshairs.
However, if 1.2100 holds firm, a challenge of the February high (1.2243) is hardly out of the question.
XE Market Analysis Europe – 29th April 2021
GBP>EUR – 1.1516
GBP>USD – 1.3957
EUR>USD – 1.2120
GBP>CAD – 1.7181
GBP>AUD – 1.7930
GBP>SEK – 11.655
GBP>AED – 5.1263
GBP>HKD – 10.834
GBP>ZAR – 19.798
GBP>CHF – 1.2705
· EUR Harmonized Index of Consumer Prices (YoY)(Apr)
· USD Gross Domestic Product Annualized(Q1)
- EUR/USD retreats toward 1.21 on USD bounce, German CPI, US GDP eyed
- US Dollar Index bounces off 2-month lows near 90.40 ahead of data
- GBP/USD: Britain's political issues to limit sterling gains – Westpac
- USD/CNH risks a drop to 6.4410 – UOB
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