GBP/USD bulls have plenty going in their favor -- including a rare bout of certainty over UK politics and -- but they can't count on help from the options market at the moment. Cable has drifted down 0.1% to 1.2940, away from its Oct. 21 trend high of 1.3012 as some of the bullish momentum of a Tory victory -- and Brexit clarity that goes with it -- in the upcoming election ebbs.
While sterling hovers near the top of its recent range, option interest indicates further gains, at least in the near-term, will likely be capped nL2N27Z0I3.
One-month volatility, which includes the Dec. 12 election, has been leveling off near 11.5% GBP1MO=.
Additionally, large GBP/USD option expiries for Thursday and Friday by 1.2900 and 1.3000, Click here , are likely to anchor spot near current levels. Still, with the Tory poll advantage trickling higher, attention is on the upside and GBP support appears firm at the rising 30-DMA by 1.2877 and the 200-DMA by 1.2703.
A close above the weekly cloud, which spans 1.2941-1.2886, would add to bullish sentiment and put 100 and 200-DMA resistance at 1.3063 and 1.3117 in sharper focus.
A rise above 1.3168, the 50% Fib of April 2018 to September 2019 dip will give bulls the advantage, opening the way for a run to March 2019 highs by 1.3380.
GBP Chart: Click here