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All eyes and ears are on the U.K. elections coming up this week, although a victory by the Conservatives seems to be in the bag. How might pound pairs react?

U.K. monthly GDP (Dec. 10, 10:30 am GMT)

  • Economy probably expanded by 0.1% in October, rebound over earlier 0.1% contraction
  • Data fell short of estimates in two out of the last five months
  • Manufacturing production probably recovered by 0.1% after a 0.4% slump

U.K. general elections (Dec. 12)

  • Latest batch of opinion polls reflects slowing support for Tories
  • Tories need to win 326 seats to secure a majority
  • Majority victory for Conservatives likely pound bullish, but “buy the rumor, sell the news” reaction still possible
  • Odds of a hung parliament could drag sterling sharply lower
  • YouGov to release final set of MRP poll results on Dec. 10

Technical Snapshot

  • Stochastic shows that most GBP pairs are approaching overbought conditions, with GBP/USD, GBP/CAD, and GBP/EUR giving off the strongest bearish vibes.
GBP Pairs RSI from MarketMilk
GBP Pairs RSI from MarketMilk
  • However, moving averages still put most pound pairs in bullish territory, with the exception of GBP/NZD.
  • GBP/AUD is the most bullish of the bunch based on its 200 SMA.
GBP Pairs Moving Averages from MarketMilk
GBP Pairs Moving Averages from MarketMilk

Missed last week’s price action? Check out the GBP Weekly Review for Dec. 2 – 6!