GBP/USD eases from 8-month tops, still comfortable above mid-1.3100s
|- GBP/USD remains well supported by increasing odds of a majority for Conservatives.
- A subdued USD price action further collaborated to the pair’s goodish positive move.
- Investors now seemed reluctant ahead of the UK election and FOMC policy update.
The GBP/USD pair spiked to fresh eight-month tops during the early part of Monday's trading session, albeit quickly retreated around 20 pips thereafter.
Following the previous session's modest pullback, the pair managed to regain some positive traction on the first day of a new trading week. The British pound remained well supported by the fact that the incoming UK polls for the upcoming general election have been indicating a majority for Prime Minister Boris Johnson's Conservative party.
Bulls likely to turn cautious
Apart from the UK political optimism, a subdued US dollar demand played its part in supporting the pair's goodish intraday positive move to the 1.3180 region – the highest since early April. A sharp pullback in the US Treasury bond yields, coupled with persistent US-China trade uncertainty kept a lid on the post-NFP USD positive move.
It is worth mentioning that top White House Economic Adviser, Larry Kudlow confirmed on Friday that the December 15 deadline to impose new tariffs on around $156 billion worth Chinese products remains in place and also added that the US President Donald Trump is pleased with the recent progress in trade negotiations.
Meanwhile, the uptick lacked any strong follow-through as investors now seemed reluctant to place any aggressive bets, rather might prefer to stay on the sidelines ahead of the highly anticipated UK general election on December 12. This along with the latest FOMC policy update will help determine the pair's near-term trajectory.
Technical levels to watch
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