Chart of the day: Pound gathers steam
British Prime Minister Theresa May on Wednesday triggered Article 50 to start proceedings to leave the European Union and by Friday Donald Tusk, president of the European Council, laid out its terms. In the process, the country did not fall off a cliff edge and the Brits kept calm and carried on. This was reflected in the exchange rate where the pound gained a little further against the euro and implied volatility on puts and calls is now equal – at the observed level of 9.25 per cent. Since mid-July, the euro has formed a potential complex head-and-shoulders top, its neckline just under Fibonacci retracement support at £0.8435 per euro. A weekly close below here targets £0.786, helped by a death cross in the 50- and 200-day moving averages.
Nicole Elliott is a technical analyst