The UK Prime Minister Lizz Truss has resigned sparking a rally for the GBPUSD. Will this momentum continue or be short lived?
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The UK Prime Minister Lizz Truss resigned earlier this afternoon sparking a rally for the GBP. Lizz Truss is the shortest serving Prime Minister in history, only lasting 44 days. The opposition leader of the Labour party Kier Starmer is asking for a general election whilst the Conservative party is looking for a new leader which features familiar faces like Rishi Sunak and Boris Johnson. Despite this rally we could see it being short lived due to the underlying fundamental problems with the GBP. Not only this but against the USD we could see the price trade back below 1.1200 due to the USD strength in the market. If the Fed begins to hike rates more aggressively could have a negative impact on the GBPUSD price.
The price is currently trading between the key 1.1200 and 1.1400 level. The 1.1400 is a strong level of resistance which price continues to fail at. If the price however breaks and closes above this level we could see buyers push prices higher. However, with all the other fundamental factors looking negative for the price of cable we could expect a move below the 1.1200 level. If the price trades below this level and forms a strong close we could see sellers push the price lower.
Did you see our EURAUD Analysis? You can see it here.
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