GBP/USD Steady Amid Labour's Election Victory and Focus on U.S. Jobs Data
GBP/USD traded up 0.05% within a narrow range of 1.2755-1.2767, showing a muted reaction to the election results. Exit polls indicated a sweeping victory for the UK's Labour Party, significantly altering the political landscape as the Conservatives faced a major defeat. The market's focus is now on London's response to the election outcome and the volatile U.S. jobs data. Positive daily momentum studies and contracting 21-day Bollinger Bands point to a modest positive bias, though mixed signals from the 5, 10, and 21-day moving averages suggest some uncertainty.
Support levels are initially at Wednesday's low of 1.2679 and last week's base of 1.2613, while resistance levels are at this week's top of 1.2776 and the June high of 1.2859. Sterling has remained resilient following the dramatic Labour win, which aligns with poll predictions. Labour's leader, Keir Starmer, is viewed as a center-left figure, offering stability after years of political turbulence under Conservative governments. Labour's policies will be detailed in the Autumn Statement, with significant challenges ahead, including rising debt interest payments, increased health and defense spending, the costs of reducing greenhouse gas emissions, and the effects of an aging population. Starmer will need to secure funds to meet election promises while maintaining investor confidence.
LSEG indicates a 56.7% chance of a quarter-point Bank of England rate cut on August 1, little changed from Thursday after a BoE survey showed a fall in employer wage expectations. Upcoming data and statements from the new government will be crucial for sterling. Technically, GBP/USD daily momentum studies are climbing, Bollinger Bands are contracting, and the 5, 10, and 21-day moving averages are coiling, suggesting consolidation at a three-week high. Initial support is found at Wednesday's low of 1.2679 and last week's base of 1.2613, while resistance is at this week's high of 1.2776 and the June top of 1.2859.
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