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The pound sterling crushes the dollar and wants to recover its annual maximum

The pound sterling crushes the dollar and wants to recover its annual maximum

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The British pound remains indomitable and does not give truce to the US dollar that continues to lag behind in the financial markets. At the close of the trading day on Thursday, GBP / USD added an advance of 0.42%, concluding operations at 1.3157, its highest level since last May. In this way, the British currency accumulates a monthly revaluation of 1.8% and becomes one of the most winning European currencies in December.

The monumental appreciation of the pound sterling has been caused by the rising expectations that the Conservative Particulate of the United Kingdom will win the general elections convened for December 12.

Many of the latest polls suggest that Boris Johnson’s group would get the necessary votes to win a solid majority in the House of Commons, and would be imposed on Jeremy Corbyn’s Labor. This situation would allow the Brexit agreement signed by London and Brussels to be carried out in October, leaving behind three years of political uncertainty and turbulence in the old continent.

At the moment, there are reasons to show optimism in the prospects for the recovery of the pound against its main counterparts (US dollar, euroyen Japanese ), but it is necessary to remain cautious in case the sentiment and intention of the vote Change in the UK as happened during Theresa May’s term. The worst of all scenarios for GBP would be that of a hung Parliament in which no bloc has an absolute majority to govern, as this would hamper the legislative process in Westminster.

Learn, in a simple way and in clear terms, how forex trading works and how to speculate on the direction of the pound sterling. Download here our introductory guide to the currency market and gain confidence in the operation.

GBP / USD TECHNICAL ANALYSIS

A few weeks ago we had talked about a flag pattern of positive connotations on the daily chart of GBP / USD. 

In that article we argue that the breakdown of resistance in the 1,297 region would be the prelude to a bullish explosion. This was exactly what happened. After the perforation of this roof, the price of the pair has risen almost 200 pips in terms of days and, at the moment, is a short distance from the maximum of May in the 1.3180, a key resistance. If this level is violated in the next sessions, the most likely scenario contemplates an advance to the annual maximum at 1.3382. 

The reconquest of the annual maximum would confirm that the objective of the flag pattern in the 1.3750 is still at stake.

GBP / USD TECHNICAL GRAPH

GBPUSD technical chart

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