Who Wants To Be A Party Leader?
Today’s Spotlight Market
The Monetary Policy Committee of the Bank of England is scheduled to meet for the first time since the European Union referendum on July 14, 2016. UK consumer confidence fell sharply following the referendum decision to leave the European Union.? The Monetary Policy Committee will surely take this into consideration when they meet. Currently, UK interest rates are at 0.5%, which although low by historical standards, are actually higher than many developed countries. This gives the Bank of England room to cut without having to immediately resort to the hot button issue of negative interest rates.
Fundamentals
The political scene in the United Kingdom continues to remain chaotic. The governing Conservative party may have settled on a leader and new prime minister as Angela Leadsom abruptly quit the leadership race after being harshly criticized over remarks she made about motherhood. Barring any other surprises, this leaves Theresa May to take over as prime minister within days. The opposition Labour Party is also facing a leadership race as Angela Eagle formally announced she is standing for party leader. There are still outstanding questions surrounding Jeremy Corbyn, the current leader, and does he automatically qualify for the leadership ballot. Meanwhile, the question of a snap general election is still outstanding. It isn?t unprecedented for the UK to change prime ministers without a general election, power transferred between Tony Blair to Gordon Brown in 2007 and from Margaret Thatcher to John Major in 1990. However, a leadership change in the governing party as well as potential change in the opposition party following a controversial referendum might be justification for a snap general election.
Technical Notes? -? View Today’s Chart
Turning to the 3 month continuation chart, the Pound continues to be in total bear market territory. 14 day RSI indicates a severely oversold market at 17.81 A series of lower highs and lower lows has been the recent pattern and now the 1.30 level is proving to be a stiff resistance point. The 20 day Simple Moving Average (SMA) is not only well below the 50 day SMA, but the curve downward continues to stiffen. All of these moves have been reinforced by strong volume, so there are no technical signs of a bull market to be found.
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