Oh Snap - Election for Christmas
Prime Minister Boris Johnson’s opponent, Labor Party Leader Jeremy Corbyn will back the snap election in December.
Mr. Corbyn has long been opposing PM Johnson and Brexit in general. His most recent stance was to oppose a snap election, unless a No Deal Brexit option was taken off the table. It was, and the United Kingdom is very likely to have a general election in December. The possible date is between the 9th and 12th of December. This is the first election to take place in December since 1923.
December is not a great time of year for an election due to weather and other unpredictable factors like winter illnesses that may have an effect on the polls. But if this breaks the stalemate between the parliament and government perhaps the UK and the EU can finally finish this Brexit ordeal.
As a result, on the daily time frame, the British Pound rose a little against the Japanese Yen but could not get over the resistance at around 140.343, 61.8% Fibo. The 200EMA is now acts as support at around 137.707, 50% Fibo level. RSI is slightly below the overbought zone, and ADX indicates a strong bullish trend.
Keeping in mind that GDP cross pairs will remain volatile due to political factors, the current situation for GBPJPY indicates movement up. Once the pair gets over the resistance at 141.507, next targets will be 143.817, followed by 145.396 and 146.508. As we mentioned, the support is at the 50% Fibo level, and the 200 EMA is around 137.707.
GBPUSD correlates with GBPJPY (displayed as the yellow line on Daily GBPUSD Chart below) so you may use it to your advantage.
The RSI is below the overbought area, the ADX is showing a strong bullish trend. The first level of resistance is close to 1.30025, the next strong resistance level is around 1.30490, followed by another one at 1.31765. The support is at around 1.27111 (61.8% Fibo) level, followed by the 200EMA at around 1.26414.