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Market Analysis

Home » Featured » UK General Election Weighs on GBPUSD

UK General Election Weighs on GBPUSD

Posted by FXTimes in Featured - May 7th, 2015 4:18 pm GMT

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Technical Bias: Neutral

Highlights:

  • GBPUSD consolidates in low-1.52 region in a day of choppy trade.
  • UK general election brings volatility to forex market.
  • Latest polls suggest a deadlock between Conservative and Labour parties.

The GBPUSD consolidated in the low-1.52 region on Thursday, as investors awaited the outcome of the UK general elections, which have been described as the most contested in decades.

The GBPUSD traded at 1.5224 in New York’s midday session, as voting in the United Kingdom entered its final hours.

 

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The pair traded within the 1.5164-1.5253 range throughout the day, sifting back and forth between highs and lows. Initial support is located at the psychological 1.5200 level. Resistance is likely found at 1.5280, Wednesday’s high.

After six weeks of campaigning, Britons headed to the polls on Thursday in what many have described as the closest election in decades, as the incumbent Conservative government squares off against Labour, UKIP, the Liberal Democrats and Greens. Polls opened at 7 am local time and will close at 10 pm.

According to a May 7 poll from Populus, the Conservatives and Labour party were deadlocked at 33 percent each. UKIP was third at 14 percent and Liberal Democrats fourth at 10 percent. ICM gave a slight edge to the Labour party at 35 percent, compared to 34 percent for the Conservatives.

Friday Brings Volatility

Final results are expected on Friday, which could add another layer of volatility to the global currency markets. In addition to the parliamentary results, investors will juggle UK trade data and US nonfarm payrolls. The US jobs report, which will be released at 12:30 GMT, could lead to significant price action for US dollar pairs.

US employment growth is forecast at more than 220,000 for April.

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