The British pound strengthened against most of its counterparts yesterday as YouGov poll results predict that Tories will win in the upcoming UK elections. GBPUSD rallied from 1.2826 to close the day at 1.2918 with a 59-pip gain.
Yesterday’s YouGov poll results was widely-watched by forex traders and investors. The poll has been proven to be credible after it predicted a hung parliament in 2017. It showed that Conservatives lead by 43% and estimated that they would get 359 seats. This is a significant margin over Labour which is estimated to get 32% of votes and 211 seats. The news was enough to fuel a strong rally across pound pairs as it alleviated concerns that the Tory’s lead was getting smaller and raises a risk of another hung parliament.
Today, there are no economic data due for release from the UK and the US. This probably means that GBPUSD will take its cue from updates regarding the upcoming UK elections in December. There’s also a chance that we could hear updates on the US-China trade negotiations after the HK bill was signed into law.
GBPUSD has broken past resistance at the 1.2900 psychological handle. However, the Fibonacci retracement tool shows that the currency pair may re-test it for support. It coincides perfectly with the 38.2% Fib level if you draw from yesterday’s low to today’s high. If there are not enough buyers for support to hold, GBPUSD could trade lower to the bottom of the range which I pointed out earlier this week.
On the other hand, a close above today’s high at 1.2948 could mean that the pair is on its way to test resistance at 1.2975.Download our latest quarterly market outlookfor our longer-term trade ideas.
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