GBP/USD Forecast: Pound soars on hopes the UK could avoid a hung Parliament

Valeria Bednarik FXStreet

GBP/USD Current Price: 1.3092

UK election polls show that Conservatives maintain their lead.
Poor US data alongside mild hopes of a trade deal underpinned the pair.
GBP/USD bullish toward 1.3176, despite short-term overbought conditions.

The GBP/USD pair soared to 1.3120, a level that was last seen in May this year, with the pound founding support in upbeat UK data and a more election polls, which continue indicating an advantage for UK PM Johnson’s Conservatives. One week ahead of the election, it seems that the UK would avoid a hung Parliament. Meanwhile, the Markit Services PMI was upwardly revised to 49.3 in November, better than the 48.6 forecasted.

The dollar managed to recover some ground during the US session, despite dismal local data, amid hopes the US and China are moving closer to a trade agreement. Nevertheless, the pair held around the 1.3100 figure ahead of the Asian opening. The UK calendar will remain empty this Thursday.

GBP/USD short-term technical outlook

The GBP/USD pair has room to extend its advance during the upcoming session, particularly if UK election polls support the Sterling. The pair is overbought in the short-term, as, in the 4 hours chart, technical indicators are losing strength upward but holding within extreme overbought levels, not enough to suggest upward exhaustion. The pair, in the meantime, is currently developing some 150 pips above a bullish 20 SMA, which accelerated above the larger ones. The pair would need to break below 1.3012, October monthly high, for the current bullish stance to hesitate. May high, at 1.3176, is the next bullish target and relevant resistance.

Support levels: 1.3055 1.3015 1.2970

Resistance levels: 1.3120 1.3175 1.3220

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.

EUR/USD keeps the rangebound trade near 1.1850

EUR/USD is still under pressure, drifting back towards the 1.1850 area as Monday’s session draws to a close. The modest decline in spot comes as the US Dollar picks up a bit of support, while thin liquidity and muted volatility, thanks to the US market holiday, are exaggerating price swings and keeping trading conditions choppy.

GBP/USD flirts with daily lows near 1.3630

GBP/USD has quickly given back Friday’s solid gains, turning lower at the start of the week and drifting back towards the 1.3630 area. The focus now shifts squarely to Tuesday’s UK labour market report, which is likely to keep the quid firmly in the spotlight and could set the tone for Cable’s next move.

Gold battle around $5,000 continues

Gold is giving back part of Friday’s sharp rebound, deflating below the key $5,000 mark per troy ounce as the new week gets underway. Modest gains in the US Dollar are keeping the metal in check, while thin trading conditions, due to the Presidents Day holiday in the US, are adding to the choppy and hesitant tone across markets.

AI Crypto Update: Bittensor eyes breakout as AI tokens falter

The artificial intelligence (AI) cryptocurrency segment is witnessing heightened volatility, with top tokens such as Near Protocol (NEAR) struggling to gain traction amid the persistent decline in January and February.

The week ahead: Key inflation readings and why the AI trade could be overdone

It is likely to be a quiet start to the week, with US markets closed on Monday for Presidents Day. European markets are higher across the board and gold is clinging to the $5,000 level after the tamer than expected CPI report in the US reduced haven flows to precious metals.

XRP steadies in narrow range as fund inflows, futures interest rise

Ripple is trading in a narrow range between $1.45 (immediate support) and $1.50 (resistance) at the time of writing on Monday. The remittance token extended its recovery last week, peaking at $1.67 on Sunday from the weekly open at $1.43.