UK election puts the pound back at risk

Over on the price action, we can see that the technical level is not holding up. A previous level where price has bounced is now struggling to hold up. The break out last week was quickly met with selling pressure. Sellers were more than quick to fill orders above that extreme. A snap election in November will most definitely introduce further volatility to the pound. If this election results in a small majority, it would weaken the bargaining power in negotiating the Brexit deal especially as the European Union is not expected to change its position in the negotiations.

Over on our daily time-frame, we can observe that price has rejected the level outlined. In fact, this could be classified as a false break-out. Unfortunately, this move is too big for me to enter short and place a stop loss above the previous candle. For the time being, I am waiting for a pullback. If a pull-back does take place, I would consider shorting this pair. For the time being, my bias is short, but I will continue to monitor until the R:R allows for taking a trade here.