GBP/USD Forecast: Pound stable at highs alongside Conservatives’ lead

Valeria Bednarik FXStreet

GBP/USD Current Price: 1.3141

Weekend polls continued to show a comfortable 10-point Conservatives’ lead.
Chances of a hung Parliament are still present amid a large number of undecided voters.
GBP/USD technically bullish, holding near May’s monthly high, the immediate resistance.

The GBP/USD pair retained most of its latest gains, ignoring US data as the focus remains on the UK elections and Brexit. The pair fell on Friday to 1.3100, bouncing from the level amid prevalent hopes that UK PM Johnson will get support enough to pass its Brexit deal through the new Parliament.

Sunday polls show that, ahead of December 12 election, Conservatives’ lead remains unchanged on average at 10 points. The YouGov survey, the one that gets more attention, showed Tories at 43% and Labour at 33%. Johnson’s majority, however, is still at doubt amid a large number of undecided voters. A hung Parliament will be chaotic for the UK and Johnson and lead to a Pound collapse. The UK macroeconomic calendar, meanwhile, has nothing relevant to offer this Monday.

GBP/USD short-term technical outlook

The GBP/USD pair is bullish, trading not far from its May monthly high at 1.3176, a critical resistance level. In the daily chart, the pair is developing far above its moving averages, with the 20 DMA maintaining its bullish slope but the larger ones heading nowhere. Technical indicators have lost their strength upward, but remain well into positive ground. In the shorter term, and according to the 4-hour chart, technical readings continue favoring an extension upward, as the intraday slide was contained by buyers aligned around a firmly bullish 20 SMA, while technical indicators eased amid the pair holding within familiar levels, with the RSI steady at 70.

Support levels: 1.3120 1.3085 1.3040

Resistance levels: 1.3175 1.3220 1.3260

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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