GBP/USD ends Friday on a strong note ahead of election week
|- Pound gains momentums late on Friday, consolidates weekly gains.
- Cable ends week sharply higher, post highest weekly close since April.
The GBP/USD pair rebounded late on Friday, trimming daily losses and consolidated a weekly gain of more than two hundred pips, ahead of critical days in the United Kingdom.
Volatility set to continue
The US dollar rose against majors on Friday after the release of the US official employment report. GBP/USD bottomed at 1.3099 and then bounced to the upside, ending the session hovering around 1.3135. The move off lows took on the back of a stronger pound across the board.
The pair is about to post the highest weekly close since April supported by polls ahead of the general election in the United Kingdom. “What is priced in? A small Conservative majority is probably cooked into cable – yet fewer than 68 seats projected by YouGov's Multilevel Regression Post-stratification (MRP) poll – the broadest statistical exercise leading to the vote”, explained Yohay Elam, analyst at FXStreet. According to him, a hung parliament will likely trigger a sterling sell-off while a broad majority may propel it higher.
Elections in the UK will take place next Thursday, the day after the FOMC meeting. It looks like a busy week ahead with critical events that could likely keep volatility in GBP/USD elevated, also helped by technical factors. The pair broke on Tuesday a six-week trading range, rising finally above the 1.3000 area.
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