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  • The GBP bulls failed to capitalize on the previous session’s positive momentum.
  • The latest poll indicates  a narrowing gap between the ruling and opposition party.  
  • A subdued USD demand might help limit any deeper losses, at least for now.

The GBP/USD pair finally broke down of its Asian session consolidation phase and dropped to fresh session lows, around the 1.2870 region in the last hour.

The pair met with some fresh supply on Tuesday and eroded a part of the previous session’s goodish intraday positive move to levels just above the 1.2900 handle amid increasing odds of a majority for the ruling Conservatives at the upcoming UK snap election on December 12 election.

Focus remains on UK politics

The uptick, however, lacked any strong follow-through buying, rather quickly ran out of the steam during the early European session on Tuesday after the latest poll revealed narrowing gap between Conservatives and the Labour Party, which eventually exerted some downward pressure.

On the other hand, the US dollar was seen consolidating the recent positive move and witnessed a subdued/range-bound price action on Tuesday, which might now turn out to be one of the key factors that might help limit any deeper losses for the major, at least for the time being.

Hence, it will be prudent to wait for some strong follow-through selling before traders again start positioning for the resumption of the pair’s recent rejection slide from the key 1.30 psychological mark amid absent relevant market moving economic releases from the UK.

Later during the North-American session, the US economic docket – featuring the release of the Conference Board’s Consumer Confidence Index and Richmond Manufacturing Index – might influence the USD price dynamics and produce some meaningful trading opportunities.

Technical levels to watch