GBP/USD deflates to the mid-1.2900s, UK elections eyed

The Sterling is now easing some ground vs. the buck ahead of the European open on Thursday, taking GBP/USD to the lower end of the range near 1.2950.

GBP/USD focus on elections

Cable managed to climb as high as the 1.2970 region on Wednesday, closing its fourth consecutive session with gains. However, the upside momentum seems to have run out of legs around that area, sparking the current leg lower.

GBP should stay under pressure ahead of today’s UK elections, with latest poll still favouring Conservatives vs. Labour, albeit by a tight gap, while the potential final outcome regarding majority/minority status of the governing party still appears unclear. Recall that polls close at 10pm BST.

Yields in the UK money markets have been trading on the defensive as of late, with the key 10-year navigating levels last seen in October 2016 in the sub-1.00% area.

Other than UK election, spot should remain vigilant on the ECB meeting (via EUR/GBP price action) and the testimony of the former FBI Director J.Comey before the Senate Intelligence Committee.

GBP/USD levels to consider

As of writing the pair is losing 0.03% at 1.2955 facing the immediate support at 1.2921 (20-day sma) followed by 1.2845 (low Jun.5) and finally 1.2767 (low May 31). On the other hand, a breakout of 1.2969 (high Jun.6) would aim for 1.3013 (high May 25) and then 1.3051 (2017 high May 18).