GBP/USD Daily Forecast – Sterling Sellers Cap Rally at 1.2950

YouGov Poll Predicts 68 Seat Majority for Johnson’s Conservative Party

The latest YouGov poll was a victory for Prime Minister Boris Johnson as it suggests the Tories will win a 68 seat majority at the upcoming election on December 12.

The YouGov MRP poll, which was released yesterday, gained respect after correctly predicting two years ago that Theresa May would lose her majority. The main difference between the MRP poll and the other YouGov polls earlier in the week is the number of people interviewed. The MRP poll reflects an audience of 50,000 people where the earlier polls only comprised the views of about 1,000 people.

GBP/USD began rallying ahead of the poll but has struggled to cross over the 1.2950 price point. Volatility in the pair is likely to decrease in the second half of the week as US traders will be on holiday in observance of Thanksgiving.

On a separate note, Nationwide house prices were reported to increase half a percent in November. Analysts were only looking for an increase of 0.1%. It was the second consecutive month that UK house prices rose higher than expected.

Technical Analysis

Yesterday’s push above resistance at 1.2904 was important and points to strength in the currency pair. However, the pound to dollar exchange rate has been trading in a sideways consolidation since late October and the bullish push yesterday has not changed that outlook.

It would take a push above channel resistance to signal a range break. The upper bound of the channel I’m referring to falls at roughly 1.2965 at the moment.

Note that there is further resistance around that level from highs posted on the 18th and 21st of this month.

I suspect buyers will defend 1.2904 on declines. But the most likely scenario at this stage might be for a range to play out. The reason being that volatility typically slows quite a bit during holiday trading.

Bottom Line

• GBP/USD is showing strength as the latest YouGov poll has encouraged buyers.
• At the same time, the pair has been in a range for more than a month now. For this reason, and because of the Thanksgiving holiday, I think the upside over the next two days will be limited.