GBP/USD fades a spike to 1.2980 as UK vote gets underway

The bulls loosened their grip on the pound, prompting a retreat in the GBP/USD pair from 10-day highs posted last hour at 1.2978.

GBP/USD: A big day ahead

The cable reversed course sharply and fell back to the familiar region near the mid-point of 1.29 handle, amid increased cautiousness, as  the Britons head for polls.

Moreover, a profit-taking slide in the major cannot be ruled out, after the recent stretch of gains seen over the past week, as markets resort to clearing out positions heading into the key risk event for the pound – the UK general elections.

Ahead of the UK vote exit polls and final outcome, the spot may continue to trade choppy, within range, as attention now turns towards the ECB monetary policy decision, which may have a significant impact on EUR/GBP and therefore, on the British currency.

GBP/USD Levels to consider            

Slobodan Drvenica at Windsor Brokers Ltd noted: “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, “Slobodan added.