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  • US election: Biden consolidates lead in two key states.
  • Cable steady around 1.3000, without a clear direction.

The GBP/USD pair is moving sideways around 1.3000 as the US dollar consolidates across the board with traders awaiting the results of the elections that now show candidate Joe Biden as the most likely winner.

Wall Street is rising sharply with the Dow Jones up by 2.63%. Crude oil gains 3.40%. The bold optimism seen in equities is not present at the moment in the currency market. The US dollar presents minor gains versus commodity currencies and also versus its main European rivals.

Market participants mostly ignored economic data from the US. ADP informed private-sector payrolls rose by 365K below the 650K expected. Attention continues to be set on the elections.

Democratic candidate Joe Biden was about to take Wisconsin and increased its lead in Michigan. Both states could open the doors of the White House. Still, the margin between him and President Trump is very tight, so as long as there are votes to count, a definition could take more time.

In the UK, lawmakers approved a lockdown for England for the period of one month. The pound remained steady, holding onto modest losses versus the dollar and also the euro. Wednesday’s report showed that COVID-19 cases rose to 25,177 from 20,018 of the day earlier.

Bank of England official will announce its decision on monetary policy on Thursday at 07:00 GMT. “ We look for unchanged Bank Rate and £120bn of QE. Risks of a rate cut to 0% have risen with Lockdown 2.0”, explained TDS analysts.

From a technical perspective, GBP/USD is moving sideways with a slightly bullish bias as long as it remains above the 1.2880/1.2900 area (horizontal support, uptrend line and the 100-day moving average). A firm break lower should clear the way to more losses. On the upside, the immediate resistance is seen at 1.3070, followed by 1.3150.

Technical levels