GBP/USD Forecast: Pound hurt by latest election polls

Valeria Bednarik FXStreet

GBP/USD Current Price: 1.2940

Market’s focus on Brexit and UK elections, fearing a hung Parliament.
A collapsing dollar was just enough to keep the pair afloat.
GBP/USD neutral-to-bullish but signs of decreasing buying interest.

The Sterling Pound was the worst performer against the dollar this Monday, affected by weekend news indicating that Conservatives lead ahead of the December 12 election continues shrinking and pointing to a possible hung Parliament. Although the market was in a positive mood, the GBP/USD pair gapped lower at the weekly opening, extending its decline to 1.2895 during London trading hours.

The UK Markit Manufacturing PMI came in better than anticipated in November, at 48.9, although failed to boost the Pound. Dismal US data, on the other hand, helped it close the weekly opening gap, yet the pair is trading at Friday’s closing level, clearly indicating that the UK currency depends solely on Brexit. This Tuesday, the UK calendar includes November BRC Like-for-Line Retail Sales, seen down by 1.7% after posting a modest 0.1% advance in the previous month.

GBP/USD short-term technical outlook

The GBP/USD pair is neutral-to-bullish according to the 4-hour chart, as the pair is currently developing above all of its moving averages, although the 100 and 200 SMA are now converging below the 20 SMA, suggesting decreasing upside potential. Technical indicators hold above their midlines, the Momentum heading marginally higher but the RSI flat, also suggesting decreasing buying interest.

Support levels: 1.2915 1.2880 1.2845

Resistance levels: 1.2950 1.2990 1.3020

View Live Chart for the GBP/USD

Author

Valeria Bednarik

FXStreet

Valeria Bednarik was born and lives in Buenos Aires, Argentina. Her passion for math and numbers pushed her into studying economics in her younger years.

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