GBP Finds Some Support in Latest ICM Poll
- Latest ICM poll shows the Conservative Party with a 12 point lead, down from 14 points last week.
- Some UK polls show UK ruling party with a lead of between 6-8 points.
GBP/USD gained in excess of half-a-cent Tuesday after the latest UK voting intention poll giving the Conservative party a 12 point lead over Labour, albeit down from 14 points last week.
The poll by ICM for The Guardian showed the Tory party at 45%, down 2%, while Labour remained unchanged at 33%. A YouGov poll last weekend showed the difference between the two major parties narrow to 5 points, before widening again to 7 points, while the latest Survation poll put the difference between the two parties at 6 points.
According to ICM the shift in polling numbers is being attributed to Labour leader Jeremy Corbyn’s populist policies, including the abolition of student tuition fees (normally GBP 9,000 a year) and the return to state funded grants, resonating with younger voters.
GBP/USD picked up Tuesday, after a long bank holiday weekend, to trade just under 1.2900 from Friday’s low of 1.2775. The British Pound has also bounced off the 50-dma and is within half-a-cent of breaking back above the 20-dma, another potentially bullish trigger.
Chart: GBP/USD Daily Timeframe (February 2 – May 30, 2017)
And the latest IG Client Sentiment Data, show retail investors remain short GBPUSD.
Retail trader data shows 42.2% of traders are net-long with the ratio of traders short to long at 1.37 to 1. In fact, traders have remained net-short since Apr 12 when GBPUSD traded near 1.24853; price has moved 3.1% higher since then. The number of traders net-long is 5.6% lower than yesterday and 10.2% higher from last week, while the number of traders net-short is 13.8% higher than yesterday and 4.0% lower from last week.
We typically take a contrarian view to crowd sentiment, and the fact traders are net-short suggests GBPUSD prices may continue to rise. Positioning is more net-short than yesterday but less net-short from last week. The combination of current sentiment and recent changes gives us a further mixed GBPUSD trading bias.
--- Written by Nick Cawley, Analyst
To contact Nick, email him at email@example.com
Don't trade FX but want to learn more? Read the DailyFX Trading Guides
DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.