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  • GBP/USD defies the upside break of a two-month-old descending trend line.
  • Recent polls mark a tough race between the Democrats and Republicans.
  • US dollar reverses the previous day’s heavy losses, stocks, bond yields drop.
  • 100-day EMA, an ascending trend line from June 29 lure the bears.

GBP/USD slumps over 50 pips in its latest drop from 1.3036 to currently around 1.2970/65 during early Wednesday. The pair portrays the broad US dollar strength amid fears of the Republicans’ victory in the 2020 US elections.

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In doing so, the quote reverses the early Asian run-up to the highest levels since October 22 while also not respecting an upside clearance of the multi-day-old resistance line.

The pair’s moves could be traced to the US dollar gains that propel the dollar index (DXY) to snap a three-day losing streak with the heaviest gains in over a month.

For now, GBP/USD traders eye a 100-day EMA level of 1.2890 as nearby support ahead of challenging a multi-day-old support line near 1.2880/75.

Meanwhile, bulls are likely to return only if the quote successfully refreshes the fortnight high of 1.3140.

GBP/USD daily chart

Trend: Further weakness expected