The pound had the best day in months in the market. Initially, it came under pressure amid speculations over the announcements of PM May. When she call for an early election for June (the event of the day), the currency started to rise and it continued afterward, breaking key technical and psychological levels in many crosses. Today’s announcement, showed that May expects voters will favor the Conservative Party, increasing its majority, as polls suggested over the weekend. The call for election needs the approval of Parliament. May is looking for support to face the Brexit process. Since she becomes PM, repeatedly rejected the idea of an election before 2020 (until today).
The GBP/USD pair had the best performance in three months. It broke two key medium-term resistance levels. The area around 1.2900 capped the upside and it pulled back below 1.2860. That area is now important: a consolidation on top would strengthen the case for an extension above 1.3000. While if during the next hours it holds below 1.2860, a correction or consolidation seems likely. The upside bias that the pair has, confirmed and reinforce. Only a decline under 1.2620 would create doubts about the bullish bias.
Support levels: 1.2800 1.2760 1.2680
Resistance levels: 1.2860 1.2940 1.3050