GBP/USD analysis: it's all about elections this week

Valeria Bednarik FXStreet

GBP/USD Current price: 1.2890

The GBP/USD pair managed to close the week marginally higher, but below the 1.2900 level, helped by a weaker greenback and despite undergoing political woes. Ahead of the General Election that will take place this Thursday, polls show that PM May's Conservative party has been losing the lead, rising concerns over a possible hung Parliament. A poll released over the weekend, shows that Conservatives have the 40% of voters' intention, while the Labour party advanced to get at this point 39%. Adding to political woes, the UK suffered another terror attack on Saturday that led to at least seven dead, although seems unlikely that May will delay the election. Headlines on election will likely dominate the pair ahead of the event, with wild spikes expected any side of the board and cautious recommended. Technically, the pair maintains a neutral stance, as in the daily chart, is holding right below a flat 20 DMA, providing resistance at 1.2920, while technical indicators head marginally lower around their mid-lines. In the 4 hours chart, the price has been holding above a horizontal 200 EMA at 1.2840, and now stands above a modestly bullish 20 SMA, but the Momentum indicator heads south around its 100 level whist the RSI stands at 54, diverging from each other, and therefore failing to provide clues on what's next for the pair.

Support levels: 1.2840 1.2800 1.2760

Resistance levels: 1.2920 1.2960 1.3000

View Live Chart for the GBP/USD

Author

Valeria Bednarik

FXStreet

Valeria Bednarik was born and lives in Buenos Aires, Argentina. Her passion for math and numbers pushed her into studying economics in her younger years.

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