GBP/USD consolidates gains around 1.2900 on the back of a stronger pound
|- Pound among top performers on Monday amid UK polls and data.
- Cable rises after falling during four consecutive days.
The GBP/USD pair rose on Monday, ending the American session around 1.2900, with a gain of 65 pips. The pound was among the top performers as polls show the Conservative Party leading ahead of the general election in the United Kingdom.
Expectations of a significant victory for Conservatives increase the odds of a Brexit deal passing the UK Parliament. Prime Minister Johnson’s party announced it would seek a vote on the Brexit deal before Christmas. Also, better-than-expected data contribute to support the pound in the market as the CBI Distributive Trade Survey on realized sales improved to in November to -3 from the previous -10.
The US dollar posted mix results on Monday. It lost ground during the Asian session but the recovered strength on the back of higher US yields. The DXY rose 0.05% and posted the highest daily close since November 13, above 98.30.
Cable with neutral outlook ahead of the Asian session
Valeria Bednarik, Chief Analysts at FXStreet, sees the GBP/USD neutral in the short term. “In the 4 hours chart, the price is battling with directionless 20 and 100 SMA, but above a bullish 200 SMA. Technical indicators lack directional strength, although the Momentum is leaning lower within negative territory, while the RSI steadies around its mid-line.”
Bednarik adds the GBP/USD managed to recover from the 1.2810 price zone, a critical Fibonacci support. “Slides will likely remain contained as long as the price holds above this last.”
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