It’s the final day of campaigning ahead of the general election on Thursday. The latest YouGov poll shows the Conservatives with 339 seats, well ahead of Labour, which has 231 seats. This would mean that the Conservatives would form a majority government. Such a scenario would likely send the pound higher, as Prime Minister Johnson could then move ahead to withdraw the U.K. from the European Union. Still, election polls do not go to the voting booths, and if support for the Tories fades, the result could be a hung parliament, which would leave plenty of political uncertainty, nervous investors, and perhaps a weaker pound.
Technical Analysis
GBP/USD has been range-bound since last week, but that could change, as the pair is making some noise. GBP/USD is putting pressure on support at 1.3100 – we could see this line tested shortly. On the upside, 1.3200 remains vulnerable, as the line was tested on Tuesday, before the pair retracted. Note that this was the first time that this line was tested since March.
Pacific Currencies – Summary
USD/CNY
USD/CNY is steady in Wednesday trade. The pair is currently at 7.0375, up 0.09% on the day. The pair continues to hover around 7.0400, which is an immediate resistance line. If the pair can break above this line, it has room to make strong gains, with the next resistance line at 7.0480.
AUD/USD
AUD/USD is trading at 0.6819, up 0.12% on the day. Westpac Consumer Sentiment fell by 1.9%, its third decline in four months. This soft release comes on the heels of a de-acceleration in business confidence, which raises concerns about the health of the economy.
NZD/USD
NZD/USD has posted slight losses for a fourth straight day. Currently, the pair is trading at 0.6531, down 0.19% on the day. Later in the day, New Zealand releases the Food Price Index and Visitor Arrivals, so we could see some slight movement from the pair later in the day.