GBP/USD touches a high of 1.3144 on the day, best levels since May
There's still no stopping the pound for the time being as buyers continue to keep the upside momentum going after running stops above 1.3000-10 in trading yesterday.
Price is now trading at its best levels in seven months and it doesn't look like it may stop any time soon with cable looking towards the May high of 1.3185 next.
At this stage, I would argue that the pound is pricing in a little of the more optimistic election outcome i.e. Conservatives winning a majority. Looking at the bigger picture:
We can see that cable is even looking to hold a break above both the 100 and 200-week moving averages. If buyers can manage that, I reckon that is a key tipping point in the scales for the pound moving forward.
Anything around the region of 1.32 to 1.34 would fit well into moderate pricing for a Conservatives majority and if that delivers next week, a combination of fundamentals and the technical picture could easily see cable run up above 1.35 in the short-term.
The risk for the pound now is if the election ends up with another hung parliament and that will sap out all the optimism we're seeing from the technical break since yesterday.
As such, there is reason to be buoyant about further gains in the pound but just be mindful that the risks are also rather high for a potential meltdown. The 2017 election and 2016 Brexit referendum serves as two great examples of that.
