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Cable plunges as PM May fails to secure majority

British pound has been in focus in the last day or two but definitely since exit poll correctly implied what in the U.K. is called a hung parliament. Instead of strengthening her hand, as she hoped, PM Theresa May will instead need to form a coalition government.
Cable gapped about 200 pips lower immediately after the release and extended the decline to more than 300 pips by the time London opened for business. The pair has been basically trading sideways ever since the gap but in a volatile fas…
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Upside in USD/CAD appears more likely

Monthly chart:
The pair is in uptrend since 2011. It broke 200 month SMA in January and traded above 50.0% retracement of the January 2002 to November 2007 decline. I'd say the retracement has been properly broken as the pair posted second monthly close above that level in March. February 2009 high (1.3064) now comes into focus, before 61.8% retracement at 1.3462. The broken 200 month SMA is acting as support.
Weekly chart:
After strong rally since June 2014 and 1000 pips of gains till the end …
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al_dcdemo avatar

UPDATE 2: Friday's NFP move appears to be a bit overdone and a pullback to 1.2500 - 1.2550 appears likely, before potential follow through move lower. The direction will also strongly depend on Canadian Ivey PMI and US ISM Non-Manufacturing PMI, which will be released on Monday at 14:00 GMT. Range support at 1.2350 is the first strong level to watch.

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al_dcdemo 11 4月

UPDATE 3: Canadian Dollar defied US Dollar strength in the first part of the week, but after huge build-up was shown in Crude Oil Inventories report on Wednesday, the pair reversed sharply. FOMC Minutes, released few hours later, didn't help it. It added another cent on Thursday and early Friday, but another reversal came after much better than expected Canadian Employment Change (though the details were not as strong).

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al_dcdemo 12 4月

UPDATE 4: Focus in the week ahead will be on the BOC meeting on Wednesday. Even though no change is expected in Overnight Rate, the market may be expecting dovish Rate Statement or at least some downside revisions in the Monetary Policy Report. If that doesn't happen and oil continues to consolidate, there's risk that the pair breaks three-month range bottom at 1.2350. Most likely scenario is, however, that the pair remains range-bound.

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al_dcdemo 18 4月

UPDATE 5: The pair was the star performer among majors this week (pip and percentage-wise) and also had the greatest weekly trading range. The break of the 3-month range came on Wednesday after the combination of almost hawkish BOC and recovering price of oil sent the pair down to 1.2280. The downtrend continued on Thursday and into Friday, but the pair then recovered by almost 200 pips in a broader USD pullback.

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al_dcdemo 19 4月

UPDATE 6: Along with two speeches from Poloz and a couple of US data releases, there's not much on the calendar that may move the pair in the week ahead. Focus will likely be on technicals and flows as longer-term bulls will begin to scale into their long positions and shorter-term bears will be adding to their shorts. Most probable scenario is a retest of the broken range bottom (1.2350) from below and then continuation lower.

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