GBP/USD corrects from multi-month tops, slides to 1.3100 neighbourhood
|- Some near-term profit-taking exerts some downward pressure on GBP/USD.
- Increasing odds of a majority for Conservatives might help limit the downside.
- Investors now look forward to the US monthly jobs report for some impetus.
The GBP/USD pair finally broke down of its Asian session consolidation phase and refreshed daily lows, around the 1.3115 region in the last hour, eroding a major part of the overnight positive move.
The pair came under some selling pressure on the last trading day of the week and for now, seems to have snapped five consecutive days of winning streak. The pullback lacked any obvious catalyst and could be solely attributed to some near-term profit-taking, especially after the recent upsurge to seven-month tops.
UK political optimism might help limit losses
It is worth recalling that the British pound remains one of the best-performing currencies this week amid increasing odds of a majority for the UK Prime Minister Boris Johnson's Conservative Party. The pair rallied over 250 pips from weekly lows and climbed to its highest level since early May on Thursday.
In absence of any fresh UK political headlines, slightly overbought conditions on short-term charts prompted investors to take some profits off the table. The pullback, however, is likely to remain cushioned on the back of a subdued US dollar demand and ahead of Friday's release of the closely-watched US monthly jobs report.
It remains to be seen if the current retracement slide is still seen as a buying opportunity or marks the end of the recent upsurge. Market participants might now be reluctant to place any aggressive bids, rather prefer to wait on the sidelines heading into next week's UK general election on December 12.
Technical levels to watch
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