Today, on September 19th, the British Pound is gaining value against its American counterpart. The tendency started this morning after Scotland revealed the results of the latest independence referendum. As a result, Scotland decided to stay a part of the United Kingdom. Apparently, this triggered a bullish wave.
To be honest, the bearish tendency in the market of GBPUSD started slowing down on September 10th, when Scotland published the results of the preliminary votes, which indicated that supporters of Scotland ’s independence are outnumbered by their opponents. Therefore, the latest results weren’t surprising for some market participants.
Apparently, this is good news for the UK and its currency. The British Pound managed to gain more value against the US Dollar and the common European currency today. At the same time, the British stock index named FTSE 100 started the trading session with a 0.57% increase after the results of the referendum were published.
It should be noted that the United Kingdom, which includes Scotland , is over 300 old. It turns out that the Scottish supporters of independence were outnumbered even more than expected according to the preliminary surveys.
The key political risk in the UK is now gone. So, the rally of the British Pound started today may well continue for a certain period of time, especially amid a stable and high rate at which the British economy is recovering coupled with the fact that the Bank of England is ready to start normalizing its monetary policy in early 2015. It is very likely that the BoE is the first major central bank to start raising interest rates, thereby outpacing the Fed. With that said, higher interest rates in the UK will back an even stronger British currency against other majors.
GBPUSD
According to Masterforex-V Academy, which always helps us to define the near-term prospects of various currency pairs, the H4 chart of GBPUSD the likelihood of a bullish reversal. The reversal of the mid-term downtrend seems to have started on September 10th at the local low of 1.6053. The MF sloping channel is currently defending the entire upward move. At the same time, the price has just come above MAs 21 and 55, which is another bullish sign. When drawn together, all these factors hint at a further mid-term rally in the market of GBPUSD.
Still, before the price goes to new highs, it may retrace down to 1,6384 or 1,6234, which are the current levels of support. If the price breaks below the bottom of the ascending MF sloping channel, the prospects may be reconsidered. Still, the current rally is probably set to reach 1.6643 and 1.6534.
According to the Binary Options Department of Masterforex-V Academy, it is recommended to go long by purchasing call options on retracements. The average expiry time is 2 hours or so.
