GBP/USD Forecast: UK elections looming, Pound consolidates gains

Valeria Bednarik FXStreet

GBP/USD Current Price: 1.3147

The UK will publish updates on Industrial Production, GDP and Trade data this Tuesday.
Conservatives’ lead shrank according to the latest poll to just 8 points.
GBP/USD still looking bullish intraday but may hold on to range ahead of Thursday event.

The GBP/USD pair hit a fresh multi-month high of 1.3180, holding on to modest intraday gains ahead of the US close. The Sterling rallied on hopes UK PM Johnson will win in the upcoming general election that will take place this Thursday. The latest opinion poll by ICM showed that the Conservatives gathered a 42% vote intention, while support for Labours increased to 36%, forcing the pair to halt its advance.

The UK calendar will be quite busy this Tuesday, as the country will release the October Trade Balance and Industrial Production for the same month. The country will also unveil its monthly estimate of GDP, foresee at 0.1% vs. the previous -0.1%. Later in the day, the kingdom will release the NIESR GDP estimate for the three months to November, foreseen at -0.1% from the previous 0.1%.

GBP/USD short-term technical outlook

The GBP/USD pair is neutral-to-bullish in the short-term, and according to the 4-hour chart, as a bullish 20 SMA continues to provide dynamic support, heading north above the larger ones. The Momentum indicator eased within positive levels, holding above its mid-line, while the RSI consolidates at around 70, reflecting the absence of follow-through rather than suggesting upward exhaustion. The risk remains skewed to the upside, although it seems unlikely that the market would trigger relevant moves ahead of the UK election.

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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