*OspreyFX would like to state that traders should research extensively before following any information given hereby. Please read our Risk Disclosure for more information.
GBP/USD Price Review Talking Points:
- Bullish despite Brexit uncertainty, although it is still one of the major reasons for a possible deacceleration.
- GBP Could start making a retracement and drive the focus to the 1.30 area.
GBP/USD Price Review: Keeps its bullish stance ahead of the UK elections
The UK elections are drawing closer, and all eyes will be on the GBP pairs in the FX sphere during election week. Regarding the national economy, such a front is weakening in terms of the figures released, showing slowdown and further contraction in the United Kingdom.
Brexit’s headlines, while the issue remains on standby, is still one of the major catalysts of the deacceleration. The forecasts don’t seem to be showing a positive scenario.
Subscribe to our newsletter to receive our weekly updates + more straight to your inbox!
Cable’s current stance
Currently, GBP/USD continues to trade within a positive territory despite all the negative headlines. Still, it is bracing for a possible Tory victory in the coming vote, according to recent polls.
The pair is now challenging a strong resistance around 1.3181. If it breaks above such an area, then the focus will shift towards the 1.3306 level. strengthening the bullish case for the Cable.
Once that area is cleared out by the bulls, a rally is expected to take place to reach the next threshold that lies at 1.3400. There is also an ongoing upside consolidation above the 200 SMA at the 4H chart. Making a golden cross with the 50 SMA and remains supported by a trend line projected from the lows of October.
1.28 round figure looms
In a bearish scenario, Sterling could start making a retracement at the current stage, and if that happens, the focus will be on the 1.3000 psychological area. The next hurdle to overcome should be the 200-4hr SMA.
If it gives up in favour of the bears’ force, GBP/USD could plummet towards the 1.2773 level. Ahead of the 1.2579 zone that acted as a critical zone to cap the gains in the pair in September.
Technical oscillators are showing mixed signals. The RSI indicator is hovering within the overbought territory, while momentum is pointing downwards, favouring the bearish bias.