GBPUSD: Intraday Gains Stall As Labour Party Narrows Gap in New Poll

Summary:
• The GBPUSD has seen its upward march stalled at a key resistance, even as the latest polls show that the Conservative Party's poll lead is down to 6 points.

The GBPUSD’s massive surge over the past one week which had continued today, has hit a brick wall after the latest poll numbers by ICM show that the Labour Party has narrowed the gap between it and the Conservative Party to just 6 points.

GBPUSD’s Response to the Poll Numbers

According to the ICM poll, the UK Prime Minister Boris Johnson’s Conservative Party continued to maintain its 42% poll count while the Labour Party has ramped up its poll count to 36%, thus reducing the lead of the Tory party to just 6 points.

This is not an entirely unusual occurrence. In the lead up to the 2017 elections, the gap between the top 2 contending parties narrowed to just 2 points on the eve of the election, which shows just how the poll numbers can evolve as election day approaches.

Technical Outlook for GBPUSD

The release of the poll numbers has stalled the upside moves of the GBPUSD, which is now trading at 1.31549. This still represents a gain of more than 0.06% on the day, as the pair continues to leverage on poll numbers heading into Thursday’s general election. The GBPUSD is presently trading at a previous resistance seen on the daily chart; a site where previous highs occurred on Nov 6 2018 as well as May 2 and June 3, 2019.

A break above this price level to the upside will continue the remarkable recovery of the GBPUSD to the 1.3319 price level in the near term (highs of February 27 and March 15), with potential for further upside to 1.3471 (previous highs of June 2018) and 1.3611 (prior highs of January/May 2018).

On the flip side, failure to break the current resistance opens the door for a retest of the downside target at 1.2993, which is where price most recently found resistance with highs on October 18, November 1 and November 20. This area is expected to act as a new support in role reversal. A further downside target lies at 1.2785, which is where previous lows of February 14 and November 8 were found.

Further price volatility is expected as we head into UK general election day. Traders should be aware of potential wide swings as election results are released and picked up by the newswires.