GBP/USD Analysis: a breakout of the range between $1.2765/$1.3010

Richard Perry Independent Analyst

GBP/USD

A breakout of the range between $1.2765/$1.3010 was unexpected, and given the magnitude of the bull move, reflects a market taking a view. Opinion polls very rarely call the result of the UK election, but with the Conservatives holding their lead, traders have gone for it (a Conservative majority is considered to be sterling positive). A big bull candle breakout, well clear of $1.3000 opens the next key resistance at $1.3175. On a technical basis, the breakout implies around 250 pips of upside in the coming weeks. The old resistance band $1.2975/$1.3010 is also now a basis of support. We would though caution that this breakout is certainly dependent on UK polling data remaining in favour of the Conservatives (it is our view that the result will be much closer than the current polling suggests). Any tightening will pull Cable back.

Author

Richard Perry

Independent Analyst

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