GBP/USD drops 40+ pips after YouGov MRP poll

GBP/USD nosedives to 1.3145, after marking a low of 1.3125, as the latest YouGov poll showed receding Tory lead during the early Asian session on Wednesday.

Read: Breaking: Cable trades heavy on hung tighter YouGov polls

YouGov’s latest poll based on MRP indicator signalled that the ruling Conservatives Party will gain 339 seats while the opposition Labour Party is on track for 231 seats as far as December 12 election is concerned.

Markets anticipated the narrowing gap between the ruling Conservatives and the opposition Labour Party. The previous YouGov MRP, published on November 27, showed Tories on track for 359 seats with Labour Party likely gaining 211 seats, a clear 68 seats of lead. Further, poll results from Savanta ComRes recently showed Conservatives Party to gain 326 seats while Jeremy Corbyn-led opposition to win 231 seats.

YouGov’s MRP is the key indicator for the election due to its successful forecasting of a hung parliament in 2017, polls have been wrong in the past. Also, Tories have a thin majority at various places in Westminster, which in turn keeps the cable traders guessing.

On the grounds, the United Kingdom’s (UK) Prime Minister Boris Johnson and the Labour Party leader Jeremy Corbyn are trying to beat the criticism concerning their lack of sympathy via visiting various places. However, their fate will be sealed tomorrow and the same will escalate the drama to a new level.

The UK’s economic calendar registered soft production details joining weaker than forecast Gross Domestic Product (GDP) data for October.

Elsewhere, the United States (US) data was mixed and the market’s risk sentiment kept struggling with no clear sign of a phase-one between the US and China. However, investors will keep eyes on today’s Federal Open Market Committee (FOMC) meeting for fresh impulse amid a lack of major data at the UK.

Technical Analysis

Late-March high near 1.3270 holds the key to 1.3300 and the yearly top around 1.3385 while pair’s declines will 1.3100 will set the tone for the fresh downpour.