British pound races higher ahead of upcoming UK election

Sterling bid

The British pound soared to its highest trading level against the US dollar since May 2019 this week, as early election polls showed the UK Conservative party winning a majority victory. The GBPUSD pair traded above the 1.3100 level, while the British pound moved to its highest level against the euro currency in over two-years as traders cheered the news that Boris Johnson could easily win the election battle on December 12th. Sterling also benefitted from weakness in the US dollar index, as the greenback came under pressure after weak data releases from the US economy and wide-spread technical selling pressure. 

• The GBPUSD pair remains bullish while trading above the 1.3000 level, further upside towards 1.3200 and 1.3300 levels seems possible.

• If the GBPUSD pair moves below the 1.3000 level, further selling towards the 1.2960 and 1.2940 support levels remains possible.

RBA relief

The Australian dollar advanced against the US dollar this week, after the Reserve Bank of Australia kept interest rates unchanged and sounded more hawkish towards monetary policy. The AUDUSD pair advanced towards the 0.6900 level, after coming under pressure in early week trading due to negative comments surrounding Sino-US trade talks. AUDUSD traders also shrugged-off weak growth data from the Australian economy as they focused on the possibility that the central bank may be turning more hawkish.

• The AUDUSD pair is bullish while trading above the 0.6830 level, further upside towards the 0.6900 and 0.6960 levels seems possible.

• If the AUDUSD pair moves below the 0.6830 level, sellers may test towards the 0.6800 and 0.6740 support levels. 

Crypto weakness

The cryptocurrency market remained largely bearish this week, following renewed selling pressure on Bitcoin towards the $7,000 support level. BTCUSD weakness continued to translate across to the other altcoins, with Litecoin and Ethereum trading multi-month lows. Both Litecoin and Ethereum are already starting to suffer heavy losses for the month of December. The bearish trend within the broader cryptocurrency showed few signs of ending, as the total market capitalization of the entire market consolidated around the $200 billion level.

• The BTCUSD pair is only bullish while trading above $7,700 level, further upside towards the $8,000 and $8,400 levels then seems possible.

• If the BTCUSD pair holds below the $7,70 level, price could fall back towards the $7,000 and $6,500 levels.

Dollar weakness

The US dollar index moved sharply lower this week as US President Donald Trump said he would increase trade tariffs on China if a trade deal was not in place by December 15th. Officials from both sides denied that trade relations were worsening, although markets largely focused on President Trumps earlier comments. The US dollar index was also pressured by soft monthly economic data from the United States economy. The ISM manufacturing survey recorded its weakest reading in nearly a decade, while the ADP private sector job report missed market expectation.

• The USDJPY pair is only bullish while trading above the 109.00 level, key resistance is found at the 109.40 and 110.00 level.

• If the USDJPY pair continues to trade below the 109.00 level, sellers may test towards the 108.20 and 107.50 support levels.