- GBP/USD remains elevated on hops of a Brexit breakthrough.
- Cable continues its rise into next week's election and tests the five-year downtrend resistance.
GBP/USD remains solid on the outlook of next week's UK election where the Conservatives are maintaining a commanding lead. GBP/USD is currently trading at 1.3158 at the time of writing, having travelled from a lof of 1.3102 to a high of 1.3165.
Expectations that PM Johnson's deal will remove the risk supports GBP
GBP continues its rise into next week's election while the slight deterioration in the Conservative party's lead seems to have stalled. It is widely hoped that the December 12 election will bring some form of closure of the political uncertainty in the UK on expectations that PM Johnson's deal will remove the risk of the UK crashing out of the EU. This means that there is further upside potential for sterling.
"In this scenario, GBP/USD has the potential to rally towards the 1.32 area on the election result. That said, there is a significant risk that the pound will be unable to hold these gains," analysts at Rabobank argued.
"Our central view assume that that trade deal will be in place and that GBP/GBP will be trading at the 1.35 area on a 12 month view. However, our forecast that a no deal Brexit could push GBP/USD towards the 1.15 area stands."
GBP/USD levels
Cable is showing signs of momentum around the five-year downtrend at 1.3156 and at the 50% retracement of the move down from 2018 at 1.3167 and the 1.3187 May high.
"Minor support is offered by 1.3013 October high and the 20-day ma at 1.2916 and this guards the 1.2768 8 the November low. Failure at 1.2768 would probably see a slide to the 200-day ma at 1.2698. This guards the 1.2582 September high. Below 1.2582 lies the 1.2548 uptrend line. It guards 1.2196/94," analysts at Commerzbank explained.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended content
Editors’ Picks
EUR/USD clings to gains above 1.0750 after US data
EUR/USD manages to hold in positive territory above 1.0750 despite retreating from the fresh multi-week high it set above 1.0800 earlier in the day. The US Dollar struggles to find demand following the weaker-than-expected NFP data.
GBP/USD declines below 1.2550 following NFP-inspired upsurge
GBP/USD struggles to preserve its bullish momentum and trades below 1.2550 in the American session. Earlier in the day, the disappointing April jobs report from the US triggered a USD selloff and allowed the pair to reach multi-week highs above 1.2600.
Gold struggles to hold above $2,300 despite falling US yields
Gold stays on the back foot below $2,300 in the American session on Friday. The benchmark 10-year US Treasury bond yield stays in negative territory below 4.6% after weak US data but the improving risk mood doesn't allow XAU/USD to gain traction.
Bitcoin Weekly Forecast: Should you buy BTC here? Premium
Bitcoin (BTC) price shows signs of a potential reversal but lacks confirmation, which has divided the investor community into two – those who are buying the dips and those who are expecting a further correction.
Week ahead – BoE and RBA decisions headline a calm week
Bank of England meets on Thursday, unlikely to signal rate cuts. Reserve Bank of Australia could maintain a higher-for-longer stance. Elsewhere, Bank of Japan releases summary of opinions.