BTMU FX Strategy Research notes that GBP attempted to regain some upward momentum after cable finally broke above key resistance at the 1.3000-level creating scope for further modest gains in the near-term.
Going into the June-8 elections, BTMU thinks that the re-election of the current government is already largely viewed as a done deal by the financial markets, and as such it's more a question of by how many seats the government will extend its’ majority.
"If confirmed by the election results, it could encourage a further modest strengthening of the pound. However, such an outcome should already be largely priced in thereby acting to dampen further fundamental support," BTMU argues.
Thus, BTMU expects that GBP/USD could now re-enter the 1.3000-1.3500 trading range which persisted in the months following last year’s Brexit referendum.
Source: Bloomberg Pro Terminal
Junior Trader Stefan Panteleev
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