GBP/USD Forecast: Contracting Conservative lead may see the pair gapping lower

Valeria Bednarik FXStreet

GBP/USD Current Price: 1.2934

According to a weekend poll, the UK is heading into a hung Parliament.
Brexit future depends on the outcome of the UK December 12 general election.
GBP/USD technically bullish, but fundamental news will probably weigh it lower.

The GBP/USD pair finished the last week of November in the 1.2930 price zone, mostly supported by broad dollar’s weakness ahead of the close. Nevertheless, the pair has held within familiar levels, as speculative interest is waiting for the outcome of the UK general election next December 12. The Conservative lead that could result in PM Johnson’s victory also with Brexit has been shrinking these last couple of weeks, spurring concerns about a possible hung Parliament. News over the weekend hint some Pound weakness at the opening, as, according to a BMG Research poll for The Independent, such lead has halved in just one week. The latest survey attributes a 39% vote intention for Conservatives, and a 33% to Labour.

This Monday, Markit will release the final revision for the UK November Manufacturing PMI, foreseen unchanged from the previous estimate at 48.3

GBP/USD short-term technical outlook

The GBP/USD pair is technically neutral, although at the upper end of its latest range, not far from October’s top at 1.3012, the highest level since last May. For most of November, the pair has been holding above the 23.6% retracement of the October rally at around 1.2820, although below the mentioned high, and needs to break one of those to find directional strength. In the daily chart, the pair has settled above a directionless 20 DMA, while technical indicators lack strength, just above their midlines. In the 4-hour chart, the pair met buyers around its 100 and 200 SMA, both converging at around 1.2880, while the 20 SMA heads higher above them. Technical indicators stand within positive levels, although with no clear directional strength.

Support levels: 1.2880 1.2845 1.2810

Resistance levels: 1.2925 1.2950 1.2990

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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