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  • The USD witnessed a “V-shaped” recovery in the last few minutes on the rising probability of Republican victory in the House.  
  • The GBP/USD is reporting moderate losses below the 100-day exponential moving average (EMA).

The GBP/USD pair is currently trading at 1.3080, having clocked a session high of 1.3143 earlier today.

The failure to hold above the 100-day EMA of 1.3096 is likely a result of the rising probability of Republicans taking control of the House.

A Republican House, if confirmed, would be a surprising outcome, considering that the markets are expecting a split Congress – Dems to take House and Republicans to take Senate.

A Republican victory in both Chambers may embolden Trump administration to push for more stimulus. In response, the Fed may have to push rates above the neutral territory to avoid overheating of the economy.

Hence, the greenback is expected to rise on a Republican majority in both chambers.

GBP/USD Technical Levels

Resistance: 1.3096 (100-day EMA), 1.3143 (session high), 1.3215 (200-day EMA)

Support: 1.3043 (Aug. 30 high), 1.3027 (5-day EMA), 1.30 (psychological level)