Will there be a debacle in the British Pound when Boris Johnson is announced as the new prime minister in 2-3 hours? Or will everything be completely different? Was the Pound vs. Dollar crash from 1.33 in March to 1.2434 already the price of his appointment today? And then will there be the profit-taking of shorties today, who have benefited from the falling Pound for days and weeks? This is also conceivable.
British Pound in the context of the Johnson election
But, gee… let’s stick to the main scenario. The Pound is currently below the important long-term level of 1.2480 and only briefly above the low of 1.2383 on 17th of July. It currently looks as if the Pound is about to rush further down. But we don’t want to pretend trading ideas for forex traders here! Please form your own opinion!
From noon German time, but more likely at 12:45 pm, the announcement of Boris Johnson as Tory boss and premier will probably be published. From 17th to 19th of July the Pound gained 180 pips against the Dollar. However, this was due to the short-term strengthening of the US Dollar (due to interest rate statements by Fed officials). Thus, the weakness of the Pound was briefly covered. But since Friday evening the British Pound has been falling again. It is targeting its low of July 17th. If it falls below it, the way down is clear from a chart technical point of view.
Much will also depend in the short term on what Boris Johnson will say in his new role. Will he jump on the Trump train right away and want to prove his strength against Iran? Will he immediately start rumbling against the EU, or will he take a conciliatory tone? Boris Johnson is a grab bag. You never know what you’ll get. Yesterday Hendrik Leber (highly interesting interview) described him as unprincipled. Well, you can be curious about his statements.