Breaking: GBP/USD surges to 7-month high amid favorable opinion polls, levels to watch

GBP/USD is trading around 1.3040, the highest since early May. It has broken above the October peak of 1.3013 and above Tuesday peak just beneath that line. Cable is already up around 50 pips. 

Speculation about the elections seems to be behind the move. Opinion polls have been showing Labour only marginally narrowing the gap with the Conservatives. Prime Minister Boris Johnson is still on course to a landslide majority that investors are waiting for.

A poll tracker by Britain Elects has shown a 10.3 point lead for the Tories over Labour – 42.6 against 12.3%. YouGov's highly-regarded MRP survey reflected a majority of 68 seats for the ruling party over the opposition led by Jeremy Corbyn.

Pound/dollar recently formed a Golden Cross pattern – the 50-day Simple Moving Average crossed the 200-day SMA to the upside – a bullish sign.

The next level to watch is the May 9 high of 1.3045, which sterling has almost reached. Further up, 1.3135 held the pound down in April and is the next cap. The May peak of 1.3180 looms further up.

Support awaits at 1.3013, followed by the November high of 1.2985, and then by 1.2950, a high point earlier this week.

The UK holds elections on Thursday, December 12. Brexit has triggered the special winter poll, but voters are also concerned about the National Health Service, crime, and the economy. 

Investors prefer Boris Johnson to continue in Downing Street, providing certainty on Brexit and market-friendly policies. Markets are wary of Labour leader Jeremy Corbyn's hard-left ideas.