GBP/USD Forecast: Bearish outlook as bearded Corbyn rises in the polls

  • GBP/USD has been on the back foot amid several upbeat polls for Labour.
  • Trade headlines and election speculation are set to move markets.
  • Tuesday's four-hour chart is pointing to further falls.

"Jeremy Corbyn, PM" – that is a headline that many investors fear. While it has low chances, the probability of having the hard-left leader of the Labour Party in Downing Street has risen. The pound has responded with a drop. Bearded Corbyn is bringing the bears out.

Markets prefer Prime Minister Boris Johnson's Conservatives to win an absolute majority in the December 12 elections, which would then ratify the Brexit accord and enact market-friendly policies. Corbyn's massive £83 billion spending plans are keeping some investors awake at night. 

Here are three recent polls that reflect a squeeze in the Tories' margin:

  • A fresh poll from Kantar has shown a broad 11% gap in favor of the Conservatives, but seven points fewer than the firms's previous survey.
  • Survation's latest poll reflects an 11-point lead as well, and here it is down by three points.
  • ICM Research has shown a narrower seven-point gap, down from ten points.

Political analysts and traders are awaiting the "mother of all polls" – Yougov's Multilevel Regression and Post-stratification (MRP) survey. Back in 2017, this broad statistical exercise correctly foresaw the result – a hung parliament. While it failed to project the exact number of seats for each party, it was sufficiently accurate to raise expectations now.

YouGov's publication on Wednesday at 22:00 GMT may move the pound. 

Beyond the elections

The US and China have reached a "consensus" for Phase One of the trade deal – but still, have differences in the rollback of tariffs. Markets have gotten used to optimistic comments and seem to shrug off the upbeat news. Investors may wait until the world's largest economies announce a defusion of the trade war before further buying. 

The safe-haven dollar remains bid amid concerns that an agreement will fail to materialize. 

Several US housing figures are on the agenda today, but the Conference Board's Consumer Confidence stands out. It may show an improvement in November, the month of Black Friday.

See Consumer Confidence Preview: Rising confidence supports the economy

Overall, election speculation is set to dominate trading today, with a minor influence from American developments. 

GBP/USD Technical Analysis

GBP USD Technical Analysis November 26 2019

GBP/USD has dropped below the 50 and 100 Simple Moving Averages on the four-hour chart but clings onto the 200 SMA. Momentum is to the downside. 

Bears have the upper hand.

Cable may find support at the double-bottom of 1.2820, which supported the sterling in the past two weeks. Next, we find 1.2760, November's low. The next lines to watch are 1.2705 and 1.2655. 

Resistance awaits at 1.2890, which was a low point last week, followed by the weekly high of 1.2915. Next, we find two peaks which are close by – 1.2970 and 1.2985. 

Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.

If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.

FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.

The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.

Feed news

Latest Forex Analysis

Latest Forex Analysis

Editors’ Picks

EUR/USD climbs above 1.1250 as investors eye coronavirus headlines

EUR/USD preserved its recovery momentum early Friday and rose above 1.1250 during the European trading hours. Markets are doubting the Fed's policy tightening prospects as the new coronavirus variant revives concerns over the economic recovery losing steam.


GBP/USD rebounds toward mid-1.3300s on broad dollar weakness

GBP/USD reversed its direction after dipping below 1.3300 earlier in the day and started to push higher toward 1.3350. The greenback is facing heavy selling pressure amid the sharp decline witnessed in the 10-year US Treasury bond yield.


Gold clings to strong gains above $1,800 as US T-bond yields plunge Premium

Gold staged a decisive rebound on Friday and reclaimed $1,800. The intense flight to safety is causing US Treasury bond yields to fall sharply and fueling XAU/USD's rally. Investors await news on vaccines' effectiveness against the new COVID variant.

Gold News

Cardano could tank to $1 if ADA fails to defend crucial support

Cardano price is currently hovering below a freshly shattered 6-hour demand zone, ranging from $1.68 to $1.79. This resulting crash could extend to the immediate and critical foothold at $1.40. 

Read more

Black Friday 2021 Discounts!

Do you want to take your trading skills to the next level? Now you have a chance of leaping forward at attractive introductory rates. For Black Friday, FXStreet is offering discounts of up to 50% on its upgraded Premium plans. 

Subscribe now!