Richard Perry
Independent Analyst
GBP/USD
It is interesting to see that the past few sessions have been hitting the resistance around $1.3175 and been unable to push on. There is still the positive sterling bias which has helped to pull Cable well clear of $1.3000, however the market is starting to stall. The Fed on Wednesday (no surprises likely) followed by the Bank of England (definitely no surprises on election day) but the real action will be in the early hours of Friday morning. An election result going with the polls which gives the Conservatives a solid majority would be sterling supportive for the run higher. Technical momentum is strong and this is a scenario that traders are seemingly positioning for. Initial support at $1.3100 protects a drift back towards $1.3000. A retreat could be seen if the final polls show recent campaign gaffs by the Conservatives have hit them in the polls. We expect a small majority which would be the most market neutral outcome and a tepid reaction on Cable. Above $1.3175 opens $1.3250 (implied breakout from consolidation rectangle) and $1.3385 the March 2019 high.
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