- GBP/USD climbed to nine-month tops on Thursday but then started losing steam.
- Some near-term profit-taking kicks in as the UK voters head to polling stations.
- Exit polls later during the day will now provide some fresh directional impetus.
The GBP/USD pair failed to capitalize on its early uptick to near nine-month tops and has now retreated back to the lower end of its daily trading range, back below the 1.3200 handle.
The pair built on the previous session’s solid intraday bounce of over 100 pips from the 1.3100 neighbourhood and gained some follow-through traction during the early part of Thursday’s trading action. Against the backdrop of UK political optimism, the post-FOMC US dollar selloff remained supportive of the pair’s goodish momentum.
Focus remains on UK politics
The pair climbed to its highest since late-March but lacked any follow-through and started losing steam near the 1.3230 region. Given that a majority for the Conservative Party is nearly priced in, investors now seemed inclined to take some profits off the table, especially after the recent upsurge of over 10% from the low of 1.1958 posted in September.
Domestic factors are turning out to be an exclusive driver of the broader market sentiment surrounding the British pound. Hence, a subdued USD price action – weighed down by dovish sounding FOMC statement – did little to influence the pair’s price action through the early European session on Thursday.
Moving ahead, the polling stations will close at 2200 GMT and will be immediately followed by the exit polls, which should now play a key role in providing a fresh impetus to the major.
Technical levels to watch