GBPUSD started the Asian trading session hitting fresh yearly highs at 1.3511. As we progressed in the day the pair pared the strong gains and retreated back to 1.34 mark. Pound saw its biggest rally in the decade after the Conservatives secured the majority in UK Parliament. Boris Johnson now can proceed to Brexit with no obstacles. The election outcome is Pound positive and now investors focus will turn on the UK – EU relationship after the Brexit and how it will affect the GBPUSD.
China And USA Close to Phase One Deal
Investors sentiment has also improved on news that China and USA are close to signing the phase one deal, cancelling the December 15th new tariffs on Chinese imports.
GBPUSD trades 1.70% higher at 1.3386 in volatile trading as markets digest the election outcome. After the exit polls the pair breached the 1.35 mark making fresh YTD highs but as the dust settled down the pair retreated around 1.34. The technical outlook for GBPUSD is clearly bullish.
A consolidation phase between 1.3350 and 1.35 is expected for the pair in the upcoming sessions. If the Bulls break above the daily high at 1.3511 more buyers will join the action and we might have another leg higher. In that case, GBPUSD will face the next resistance at 1.3607 the high from May 13th session.
On the other hand, immediate support for the pair stands at 1.3356 the daily low and then at 1.33 the psychological mark. The next support for GBPUSD stands at 1.3094 the 200-week moving average.
All in all, the momentum is positive for GBPUSD but traders should be very careffull until the dust of the outcome of the election settles down.