 |
The British pound picked up some support against the Norwegian krone after posting a strong reversal in yesterday’s trade. Sterling hit a three-week high of 11.88 against the krone in the early London session yesterday. But this was only to give back most of the gains and close the day at 11.80.
As of 7:10 a.m. London time, the krone traded at 11.82 against the pound.
Newsflow around the UK general election continues to drive the pair. Market participants scrutinize the latest head-on-head debate between Prime Minister Boris Johnson and Labour Party’s leader Corbyn.
Things are getting a little more chaotic for Boris Johnson that he would like. Yesterday, he made a major policy announcement to cut taxes for working people by raising the minimum earnings threshold required to start paying National Insurance contributions.
Johnson said the earnings threshold would rise to 12,000 pounds. However, officials from his Conservative Party clarified that he actually meant 12,500 pounds. To make things worse for Boris Johnson, he later appeared to confuse the numbers again as the first step of the tax cut would lift the threshold to 9,500 pounds in 2020, which would save people around 85 pounds per year. Johnson told the BBC the annual difference would be 500 pounds.
The price-action in the GBP/NOK pair has been as chaotic as the recent UK election developments. Yesterday’s powerful pinbar pattern shows that the market is ready to sell near 11.90 level. A level that also aligns with the upper triangle resistance.
The pair has been slowly forming a mid-term downtrend. The 61.8% Fib level around the 11.84 level possibly providing some selling pressure in the short run. The Fib is drawn from the top to the bottom of the pair’s downturn in the first week of November.
|
