GBP/USD: Bull cross confirmed, focus on UK parliamentary vote on December election


  • A long-term bull cross seen on technical charts favors the upside in GBP/USD. 
  • Gains will likely remain elusive if the UK parliament rejects early election offer. 

The path of least resistance for GBP/USD is on the higher side, according to a key technical indicator. Big gains, however, may remain elusive if the UK parliament again rejects Prime Minister Borish Johnson's December election offer.

Bull cross confirmed

The 50-day moving average has crossed above the 100-day moving average, confirming a bullish cross for the first time since February.

The crossover indicates a continuation of the recent rally from lows near 1.22 and so does the bull flag seen on the 4-hour chart.

Focus on UK political drama

The European Union on Monday granted a three-month Brexit extension and the UK parliament rejected Johnson's proposal for snap elections.

PM Johnson will call another vote on a December election Tuesday, which has a greater chance of success, as it would only need a simple majority to succeed – not two thirds as required in previous attempts, according to the BBC.

That said, Johnson would still need support from the Liberal Democrats and the Scottish National Party. The two parties have expressed willingness to support an early election if the PM satisfies three conditions: a no-deal Brexit is ruled out, there is no attempt to pass the PM's Brexit deal before the election and the election date is stipulated.

The British Pound will likely challenge recent highs above 1.30, as suggested by technical studies if the Parliament approves an early election. If the vote fails, then GBP may drop below support at 1.2788.

On the data front, the UK housing prices, Consumer Credit, Money Supply, and Mortgage Approvals are scheduled for release during the European trading hours. Across the pond, the focus will be on the US Consumer Confidence data and Pending Home Sales. 

Technical levels

GBP/USD

Overview
Today last price 1.2848
Today Daily Change -0.0012
Today Daily Change % -0.09
Today daily open 1.286
 
Trends
Daily SMA20 1.2622
Daily SMA50 1.2436
Daily SMA100 1.2433
Daily SMA200 1.2715
 
Levels
Previous Daily High 1.2878
Previous Daily Low 1.2811
Previous Weekly High 1.3013
Previous Weekly Low 1.2787
Previous Monthly High 1.2583
Previous Monthly Low 1.1958
Daily Fibonacci 38.2% 1.2852
Daily Fibonacci 61.8% 1.2836
Daily Pivot Point S1 1.2822
Daily Pivot Point S2 1.2783
Daily Pivot Point S3 1.2755
Daily Pivot Point R1 1.2888
Daily Pivot Point R2 1.2916
Daily Pivot Point R3 1.2955

 

 

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