Save for the euro, the British pound was the only other currency to score gains against the US dollar yesterday. GBPUSD rallied to new 4-week highs at 1.2984 before closing the day at 1.2950, up 30 pips from where it opened for the week.
The only economic data that came out of the UK yesterday was Rightmove’s house price index. It showed that asking prices of homes for sale declined by 1.3% for November from 0.6% in October.
However, developments on the political front continued fuel the pound’s rally. The latest polls released yesterday show that Conservatives are consistently in the lead ahead of the upcoming UK general elections in December. The news was bullish for the pound as it would mean that a Brexit deal is likelier to be passed in Parliament.
Today, the forex calendar is blank for top-tier reports from the UK. We do, however, have the first live TV debate between the incumbent Prime Minister and Conservatives leader Boris Johnson and Labour Party leader Jeremy Corbyn.
This event will likely spark volatility in financial markets as it could provide more information on the likelihood of a Brexit deal being passed.
GBPUSD is hovering around resistance around 1.2970 where the currency established highs on October 31 and November. A strong bullish close above this level sets 1.3010 (October 21 highs) as the next area of resistance. On the other hand, if sellers dominate today’s trading, GBPUSD could fall to test support at 1.2885.Download our latest quarterly market outlook for our longer-term trade ideas.