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GBP/USD keeps steady on the day in between key hourly moving averages

The topside run yesterday ran into resistance from the 61.8 retracement level as well as offers near the 1.2900 handle, before falling back below the 200-hour MA (blue line).

As such, the near-term bias in the pair remains more neutral now as buyers failed to maintain the upside momentum from the move higher – which came after Nigel Farage gave Boris Johnson a boost in trying to achieve a majority parliament.

It’s all about election now for the pound and with price action behaving in the way it has so far, it is tough to see sustained gains/losses in the pound unless the election outlook becomes more certain in the coming weeks.

There’s still a month to go and as such, it is still early days to be fully pricing in an outcome at this stage considering that a lot can still happen in the run up to polling day.

For now, the 200-hour MA @ 1.2876 will be a key level that buyers have to break above before contending with the 1.2900 handle again. As for sellers, it is all about trying to drive price back towards a test of the 100-hour MA (red line) @ 1.2833.

Looking ahead on the week, just take note of large expiries in cable at 1.2950 (£1.2 billion, 15 November) and at 1.3000 (£1.5 billion, 14 November) that could potentially limit price gains as well – alongside the key levels noted above.

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