GBP/USD now trades at 1.2660, making a decisive fall to the downside. Further support awaits at 1.2615, followed by 1.2540. The low so far has been 1.2635, and it is not necessarily over.
Exit polls pointed to a hung parliament and the real results gradually confirmed them. After 645 out of 650 of the seats have been declared, it looks like the most hung of hung parliaments. The Conservatives cannot create a coalition with DUP, whole Corbyn would need all the other parties.
It is quite a mess, and the pound is extending its falls.
Here is how parliament is divided right now, courtesy of the Guardian. CON have 314, short of 326 for a majority. Together with the Irish Unionists which would support them from within or without, would provide only with 10.
On the other side, Labour has 261, and together with left-leaning SNP, center LibDems, left-wing Greens, he would also fall short of a majority.
If it were clear that there is going to be a coalition of some sort, we would at least be hoping for a softer Brexit, especially if the pro-Remain LibDems would be kingmakers.
Under such conditions, we could even see another round of elections to sort things out. This would only delay the negotiations on Brexit, and the clock is ticking.
Here is the GBP/USD hourly chart, showing the big fall. It is important to note that trading volume is now picking up, and European traders are joining the fray.Get the 5 most predictable currency pairs