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Dec 09 - 12:12 PM
GBP/USD - COMMENT-UK Tory Election Hope Propels GBP/USD To 7-Month High Above Key Fib
First appeared on eFXplus on Dec 09 - 10:00 AM

GBP/USD remains bid, trading near recent 7-month highs by 1.3150, though off overnight and early NY peaks by 1.3175-80 nL1N28J06J, extending its rally with the help of polls indicating PM Johnson Conservatives will win.
The latest polls show a 14 percentage point Tory nL1N28J05Q, suggesting a Tory majority would deliver the UK withdrawal from the EU by the current Jan.
31 deadline.
That is soothing fears of economic uncertainty related to a disorderly Brexit.
Technically, continued GBP/USD strength seems in order with the pound's rise above the key 50% Fib of April 2018's 1.4377 high and 1.1959, September 2019's low at 1.1959 by 1.3168.
Adding to bullish GBP sentiment is the further reduction of GBP/USD spec shorts.
In the recently closed IMM reporting period nL1N28G1DR, Nov.
27 to Dec.
3, GBP/USD long positioning grew from 38.6k to 47.8k outstripping GBP short-covering, which has been the catalyst for recent GBP/USD gains. Despite that, shorts actually rose from 75.2k to 77.8k.
A close above the 50% Fib at 1.3168, and further GBP long position gains, would open the way for further GBP/USD gains with 1.3190, the May 2019 high, a mere speed bump on the way to 1.3380, March's 2019 high.

GBP Chart: Click here

Refinitiv IFR Research/Market Commentary


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