GBP/USD: Cautious optimism challenges bulls near multi-month top
- GBP/USD stays modestly changed from Friday’s low.
- Weekend polls keep Tories on the top despite recent challenges to the UK PM.
- All eyes on December 12 UK elections, monthly activity/growth numbers can offer intermediate direction.
GBP/USD pays a little heed to the weekend polls while trading around 1.3135 amid the initial Asian session on Monday. Traders seem too cautious to extend the recent run-up beyond the seven-month top ahead of the key election in the United Kingdom (UK).
Weekend polls suggest that the ruling Conservatives Party continues to hold top positions across all major surveys. However, the opposition Labour Party seems to cut the lead as far as data from ComRes and Deltapoll are concerned. Details from ComRes indicate a hung parliament with the Tory lead cutting down to six points.
The latest from the UK politics indicate that the Prime Minister (PM) Boris Johnson admits that there will be minor checks between the UK and Northern Ireland while also clarifying the promise of 50,000 nurses as it will include the retention of 19,000.
Further, the UK PM has mostly been criticized for not participating in the general debates but the recent one on Channel 4 seems to be good for the Tories. The reason to be was Cathy Newman’s performance.
On the other hand, the United States (US) hasn’t yet turned down the scope of fresh tariffs on Chinese goods that are up for December 15. The same keeps market players worried as phase-one talks are yet to provide any strong development.
With this, the market’s risk sentiment seems to be a little compressed with USD/JPY and S&P 500 Futures staying mostly close to Friday’s levels of 108.60 and 3,145 respectively.
Although Thursday’s election will be the key for GBP/USD traders, monthly readings of Manufacturing Production, Industrial Production and Gross Domestic Product (GDP) could offer intermediate moves to the pair.
Technical Analysis
Highs marked in May and April, close to 1.3180 and 1.3200, can keep prices under check while sellers can enter below 1.3100 with October highs near 1.3013 being the target.