The UK election is approaching! The pound continues to expand its gains
The pound has been continuously strengthening since June 27th. During Thursday's Asian trading session, the GBP/USD traded around 1.2750, possibly due to weak data released by the US on Wednesday.
The market is expected to closely monitor Thursday's UK election. Britain seems to be preparing to elect Labour leader Keir Starmer as the next Prime Minister, but after 14 years of turmoil, the Conservative Party led by Rishi Sunak has been ousted. The survey company Survivation predicts that the Labour Party will win a record number of seats in the national election.
Analyst Akhtar Faruqui pointed out that daily chart analysis shows a bearish trend when the GBP/USD is consolidating in the downward channel. However, the relative strength index (RSI) above 50 on the 14th indicates that any future decline will be mild. Further trends may indicate a clearer direction.
He pointed out that the GBP/USD may test the upper boundary of the downward channel around 1.2780. Breaking through this level may lead to testing the high point of 1.2860 for the currency pair in June.
On the downward trend, the key support level appeared at the 21 day moving average (EMA) of 1.2694. If it falls below this level, it may put pressure on the GBP/USD, forcing it to trade around 1.2570 near the lower boundary of the downward channel.
GBP/USD daily chart
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