Global macro overview for 13/07/2016:
Mass media published information that Theresa May will be appointed UK Prime Minister after Andrea Leadsom withdrew from the Conservative leadership contest on Monday. Moreover, the current UK Prime Minister David Cameron might resign not in September, but just on days. This political change might be a reason for the British pound rally, because the new PM (if chosen) will try to invalidate the Brexit referendum. Therefore all the losses made by the pound as a reaction to Brexit might get reversed. Anyway, we will see if this political change will bring any good to the UK"s economy and whether on Thursday, the BoE will decide to cut the interest rates or introduce any other form of help in order to stimulate the economy (the BoE interest rate decision is scheduled for release at 11.00am GMT on Thursday).
Let's take a look at the EUR/GBP technical picture in the daily time frame. After making higher high just into weekly supply zone at the level of 0.8625, bears managed to cut the price towards the level of the previous higher high at 0.8380. Nevertheless, in the medium-term bulls will be still in control over this market. Higher prices are still expected.
