GBP/USD Forecast: Buying big Boris lead and the Golden Cross? Corbyn can still curb gains

• GBP/USD has advanced amid favorable polls for PM Johnson.
• Opinion polls, PMIs, and top US data, including the jobs report, promise action.
• Early December's technical chart is showing a bullish Golden Cross pattern.
• The FX Poll shows another week at familiar ranges before a downfall later on.

The greatest Tory victory since 1987 – is what a critical poll has shown and supported the pound. However, the race is still wide open, and every political development matters. Data from both sides of the Atlantic will also have its say as December kicks off.

This week in GBP/USD: Conservative landslide?

YouGov's Multilevel regression and post-stratification (MRP) poll has had the most significant impact. The 50,000 strong surveys that correctly foresaw 2017's hung parliament had shown a decisive victory for the Conservatives now. Prime Minister Boris Johnson should be able to the majority of 68 MPs and a lead of 11% over Labour that the survey has reflected until December 12. 

Investors prefer the Tories' more market-friendly policies over the radical ideas of Jeremy Corbyn, Labour's leader. Moreover, a landslide victory would help Johnson in pushing away the hardline Brexiteers and potentially strive for closer trade connections with the EU. 

However, some of the regular polls have resulted in narrower leads for the Conservatives. Also, YouGov's MRP does not reflect the most recent political developments – such as on the hot topic of the National Health Service (NHS and antisemitism). And, they are unable to take into account future events. 

EUR/GBP hit six-month lows, but GBP/USD advanced only modestly – remaining shy of the 1.3013 cycle high. 

On the campaign trail, Corbyn has been under fire for failing to root out antisemitism within the party. He moved quickly to reveal that the government had been in close talks with the US on allegedly opening the NHS to higher drug prices. Both topics have pushed Brexit down the list of priorities. 

Outside the UK election bubble

Sino-American trade talks reached the "final throes," according to President Donald Trump. Chinese officials said that the world's largest economies reached a "consensus" – albeit not on the most sensitive topic of removing tariffs. 

On the other hand, Trump signed the Hong Kong bill into law, angering Chinese authorities. The legislation supports pro-democracy demonstrators, and Beijing sees it as an intervention in its internal affairs. This development pushed markets lower.

Jerome Powell, Chairman of the Federal Reserve, said that he sees the economy as "more than a glass half full" – and he has good reasons for that. Gross Domestic Product has been upgraded to 2.1% in the third quarter, and investment enjoyed a rebound.

Durable Goods Orders leaped in October on all measures. Housing figures were also encouraging and only inflation – according to the Core Personal Consumption Expenditure (Core PCE), disappointed with 1.6%. 

UK events: Polls, debates, and gaffes

The elections remain left, right, and center for sterling. Markets' response to opinion polls may intensify as the clock ticks down toward the December 12 elections. Every statement by high ranking politicians will be closely watched, as well as races from competitive seats. 

Another head to head debate between Johnson and Corbyn is due on December 6. If the PM leaves the studio unscathed, markets may begin pricing in his victory more significantly. However, if Corbyn gains ground in the faceoff – or continues edging closer to the Tories in polls – the pound may plunge.

Markit's Purchasing Managers' Indexes for November are also of interest. Monday features the manufacturing sector, which has been struggling with Brexit uncertainty, is set to remain below 50 – thus reflecting contraction.

Construction PMI is set to remain at lower levels at the 44 handle, while the all-important services sector carries expectations for improvement. Nevertheless, the UK's largest sector will have likely contracted in November. 

Another interesting data point is the British Retail Consortium's Like-for-Like Sales figure, which is predicted to show a drop yearly.

Here is the list of UK events from the FXStreet calendar:

US events: Trade a lead up the NFP 

US-Sino trade talks remain high on the agenda for markets, despite some fatigue from the neverending saga. The administration plans to slap new tariffs on China on December 15, unless there is an accord. Investors would like to see the removal of previous tariffs. The US Dollar may benefit from safe-haven flows if the negotiations fall apart, and may drop if Washington and Beijing strike a deal.

The first week of December is packed with events. The ISM Manufacturing PMI is forecast to advance but to remain in contraction territory in November as the industrial sector has been lagging behind also in America. The publication serves as the first hint toward the jobs report. 

ADP's Employment Change is forecast to show an increase in private-sector job gains and to shape estimates for Friday's official labor market report. The ISM Non-Manufacturing PMI – and especially its employment component – also serve as hints. 

Economists expect the Non-Farm Payrolls report for November to return to the averages below 200,000, after upbeat statistics in October. Wage growth is set to hold onto the 3% seen in the previous month. The Fed is watching the data ahead of its decision in the following week. 

Here the upcoming top US events this week:

GBP/USD Technical Analysis 

The pound/dollar daily chart has continued showing that the currency pair is trading in a moderate downward channel. On the other hand, the 50-day Simple Moving Average has crossed the 200-day SMA, a Golden Cross pattern. Momentum has all but disappeared, and the Relative Strength Index is listless.

All in all, the technical picture is bullish – due to the Golden Cross.

Support awaits at 1.2820, which has provided support several times in September. It is followed by November's low of 1.2760, which also capped cable in the spring. 1.2705 was a swing high on the way up and is also the convergence of the 50 and 200 SMAs.

Resistance awaits at 1.2985, which is November's high and marginally above the late-October peak of 1.2975. Further above, 1.3013 is the six-month high. Next, we find 1.3050, 1.3080, and 1.32.

GBP/USD Sentiment

Markets are cautious about pricing in a victory for Boris Johnson, and this allows for movements to both directions – poll-dependent.

The FX Poll is showing that experts are divided in their forecasts for the upcoming week but see falling prices later on. Average targets are little changed in comparison to last week. It seems that everybody is cautious with opinion polls.

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