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Talking Points:

The GBP/USD is poised to close above 1.2900 today, despite UK Services PMI (May) missing expectations this morning. Expectations for Services PMI was set at 55, but released at an actual 53.8. Driving today’s GBP/USD rally however was new news on this week’s upcoming UK election. A recent ICM poll has suggested that Theresa May’s Conservatives may still maintain a lead over the rival Labour party going into Thursday’s election.

Technically the GBP/USD is trending higher in the short term. Traders should note that the pair is set to close the session above its 10 day EMA (exponential moving average) which is found at 1.2887. If this developing GBP/USD uptrend continues, traders may begin to target the standing yearly high at 1.3048 later in the week. In the event that the GBP/USD drops on updated election data, traders should first look for the pair to decline below 1.2887. A bearish breakout below this value would then expose the standing monthly low at 1.2769.

What’s next for the Pound and US Dollar? Read our price forecast here.

GBP/USD Daily Chart & Averages

GBP/USD Driven Higher on UK Election News

(Created Using IG Charts)

Why and how do we use IG Client Sentiment in trading? See our guide.

Sentiment figures for the GBP/USD remain net-short for Monday, with IG Client Sentiment reading at -1.39. This value indicates that 58% of traders are currently net-short the GBP/USD. While this total is not extreme, traders should note that sentiment has shifted further negative from last week’s reading of -1.14. If the GBP/USD breaks higher later in the week, traders may look for sentiment to move towards a negative extreme of -2.0 or more. Alternatively, if the GBP/USD trades lower, sentiment figures may neutralize and then potentially flip to a new positive reading.

GBP/USD Driven Higher on UK Election News

--- Written by Walker, Analyst for DailyFX.com

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