- GBP/USD rallied hard on a clear majority for Conservatives.
- Bulls took a breather amid extremely overbought conditions.
The GBP/USD pair now seems to have entered a bullish consolidation phase and was seen oscillating in a narrow trading band, just above mid-1.3400s.
Following the previous session’s rather volatile swings, the pair caught some aggressive bids during the early Asian session on Friday and rallied to its highest level since May 2018 – levels beyond the key 1.3500 psychological mark.
The British pound surged across the board in reaction to the expected outcome from the UK elections, which indicated a landslide victory for the incumbent Prime Minister Boris Johnson’s Conservative Party.
According to the latest Sky News updated forecasts, with more than 500 constituencies declared, the Conservatives have been called the clear and substantial winners in the most important UK general election.
Market participants believed that a decisive Tory victory will clear the way for Johnson to take Britain out of the EU on January 31, clearing Brexit uncertainties, which eventually will be good for the economy.
Given that the market might have fully priced in the optimism over a Tory victory and the recent rally of over 1500 pips from early September swing lows, bulls now seemed reluctant to place fresh bets amid extremely overbought conditions.
Technical levels to watch
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