GBP/USD Technical Analysis: the Bullish Opportunity is Still Stronger
A bullish stability for the GBP/USD pair awaiting any new catalysts for further gains. During last week's trading, it reached the 1.2950 resistance level before settling around 1.2915 at the time of writing. The Pound is still supported by the chances of the Conservative Party succeeding in the British elections on June 12, which will determine the fate of Brexit. Consecutive opinion polls are still in favor of Boris Johnson and his party. Boris signed an agreement to secure relations between his country and the block in the post-exit period, but the deal suffered a setback similar to what happened with Teresa May, and failed to pass through the British House of Commons, which prompted him to announce early elections to ensure a majority in the House of Commons to facilitate The task of passing the deal again. Given the importance of this election, any reference regarding who will win will have a strong impact on Sterling's trends against other major currencies.
Conservative majority will put an end to some of the pressures facing the British economy, notably the prevailing uncertainty surrounding Britain's exit from the European Union, which is ongoing for three years, as well as fiscal austerity. With the Conservatives presenting a deal ready for Brexit, and commitments to expand spending, those headwinds facing the economy could be eliminated in 2020.
The Conservative government, which has a working majority, will move the process of Brexit forward faster, and Prime Minister Johnson's deal is likely to be approved shortly after the election. This result would lead to strong gains for the Sterling.
On the other hand, there is still a risk that the fragmentation of voters could lead to a pending parliament, a result that would add further uncertainty to the UK's political future and thus weigh heavily on the Sterling.
According to the technical analysis for the pair: The GBP/USD bullish correction is still standing and waiting for a new momentum. The success in moving towards and above the 1.3000 psychological resistance will stimulate the strength of the trend, and usher in a stronger bullish move. As we expected before, we now confirm that the 1.2800 support is a strong threat to the future of the current correction. The results of the polls just 10 days before the election date will further fluctuate the Pound's performance against the other major currencies in the coming trading sessions.
As for the economic calendar data today: From Britain, the Manufacturing PMI will be released. From the US, the ISM Manufacturing PMI and Construction Spending Index will be released.
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