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GBP/USD teasing 1.3100 ahead of US election results

2018-11-7 10:40:32Market Analysis
GBP/USD teasing 1.3100 ahead of US election results

The GBP/USD is testing into the high side ahead of the first round of voting results in the US mid-term elections, and risk appetite is pinned in the "on" position in the run-up to US elections volatility.


Brexit hopes continue to keep the Sterling afloat, even though a hint of a working plan or solution on the Irish border dispute remains to be seen, but beleaguered GBP bulls are satisfied with buying on hope for the time being, keeping the GBP/USD moving higher as the clock winds down on stuck negotiations between the EU and the UK.


Late Tuesday through early Wednesday see voting results from the US mid-term election coming in, promising to send markets into upheaval as the votes get counted, but risk appetite is remaining well-bid for the time being. The economic calendar for Wednesday sees nothing but low-tier reports for both the Sterling and the Greenback, and US voting will be taking front-and-center in markets' sights.


GBP/USD levels to watch


As noted by FXStreet's Valeria Bednarik, markets are piled into the long end of Cable positioning: "the GBP/USD pair retreated from the mentioned high but recovered quickly, holding near 1.3100 and maintaining the bullish tone seen on previous updates. In the 4 hours chart, the pair remains firm above its 200 EMA, while the 20 SMA extends its advance above the larger one. The intraday back and forth in price left the Momentum indicator within familiar levels right above its mid-line, while the RSI indicator maintains its bullish slope despite being in extreme overbought readings, currently at 78. A break through 1.3105 should lead to a steeper recovery up to the 1.3185 region. If US elections result against the greenback, the GBP/USD pair rally will likely be exacerbated, while on a positive outcome for Trump, dollar's gains may be limited against the Pound."


Support levels: 1.3040 1.3000 1.2970    


Resistance levels:  1.3105 1.3150 1.3185