UOB Research comments on GBP direction in the aftermath of the UK elections noticing that volatility in the GBP should continue as positions set leading to the event are being readjusted.
"Similar to the Brexit vote last year, markets were positioned for a favorable outcome – Conservatives winning with an enlarged majority.
….GBP/USD should see a break below today’s session low of 1.2695. However, compared to Brexit day where the pair fell as much as 11% intraday, an election outcome is unlikely to share the same deep impact on the economy and currency as Brexit does. A move half the magnitude this time round may bring us eventually to 1.2100. Before that, GBP/USD looks set to first test key support of 1.2515, day low on the day (April 18) Theresa May called for snap elections," UOB ragues.
Source: United Overseas Bank Global Economics & Markets ResearchOriginal Article
