British pound is holding around fresh two-week high at 1.2970 posted on Wednesday, as vote starts. Expectations that Conservative party will win a majority in a Britain’s election keep sterling steady.
Polls released on Wednesday showed that Tories keep lead against the Labour party and are on track for a victory that would further boost pound.
Technical studies are bullish and favor further advance. Wednesday’s close above weekly cloud base (1.2950) which capped recovery and maintained pressure during past three weeks, could be seen as initial bullish signal.
The pair eyes initial barriers at 1.3000 (psychological barrier) and 1.3047 (18 May recovery peak) and may extend rally towards projected targets at 1.3150/1.3200 on victory that will provide Conservatives a healthy majority in the parliament.
On the other side, pound may come under pressure if Tories’ victory provides majority of less than 40 seats in the parliament and risk slide towards 1.2770 higher base zone.
Alternative scenario on Labour victory could trigger stronger bearish acceleration and risk return to 1.2000 zone (lows of post-Brexit vote fall).
Res: 1.3000, 1.3014, 1.3047, 1.3109
Sup: 1.2949, 1.2908, 1.2887, 1.2853