GBP/USD: Breakout remains elusive even as UK heads for December election

GBP/USD remains stuck at key resistance despite the UK parliament approving the December election.
A flag breakout on the 4-hour chart would revive the bullish view.
The bull flag will likely fail if the Federal Reserve delivers a hawkish rate hike.

Omkar Godbole FXStreet Contributor

GBP/USD's struggle for a flag breakout continues even though the UK parliament on Tuesday backed a general election on December 12.

The House of Commons on Tuesday approved legislation paving the way for the first December election since 1923, according to the BBC. The bill is expected to become a law by the end of the week.

Even so, the British Pound is struggling to draw bids. The currency pair is currently trading at 1.2863 and has spent a better part of the last 12 hours chipping away at the resistance of the bull flag on the 4-hour chart.

A flag breakout, if confirmed, would imply a continuation of the rally from recent lows near 1.22 and could pave the way for a re-test of the Oct. 21 high of 1.3012.

The breakout, however, may remain elusive or fail if the Federal Reserve cuts rates by 25 basis points and signal a rate cut pause, sending Treasury yields and the US Dollar higher across the board. It is worth noting that the market has already priced in a 25 basis point rate cut.

Ahead of the Fed rate decision, the pair may also take cues from the US Q3 preliminary GDP and the monthly ADP jobs data.

Technical levels

GBP/USD

Overview
Today last price	1.286
Today Daily Change	-0.0008
Today Daily Change %	-0.06
Today daily open	1.2868

Trends
Daily SMA20	1.265
Daily SMA50	1.245
Daily SMA100	1.2434
Daily SMA200	1.2715

Levels
Previous Daily High	1.2906
Previous Daily Low	1.2804
Previous Weekly High	1.3013
Previous Weekly Low	1.2787
Previous Monthly High	1.2583
Previous Monthly Low	1.1958
Daily Fibonacci 38.2%	1.2867
Daily Fibonacci 61.8%	1.2843
Daily Pivot Point S1	1.2813
Daily Pivot Point S2	1.2758
Daily Pivot Point S3	1.2711
Daily Pivot Point R1	1.2914
Daily Pivot Point R2	1.2961
Daily Pivot Point R3	1.3016

Author

Omkar Godbole

FXStreet Contributor

Omkar Godbole, editor and analyst, joined FXStreet after four years as a research analyst at several Indian brokerage companies.

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