Pound cheers exit polls

The pound has been the highlight in the FX space as traders reacting to the exit polls from the UK elections.

Pound
Source: Bloomberg

With the uncertainty of the election somewhat removed, the sterling rallied in most crosses with cable heading back to late-April highs. GBP/USD has surged as exit polls suggest a Conservative/Liberal Democrat coalition is headed for victory. With the Conservatives appearing to have gained ground and unexpectedly winning more seats, this seems like it is the market-friendly result.

GBP/USD was trading at around $1.5200 and has now surged to around $1.5470. At the end of April cable traded to a high just a fraction shy of $1.5500 and it seems we could be set to knock through that barrier given the momentum we are currently seeing.

There is a nice uptrend from April lows and the pair is also looking to break a downtrend from the highs of last July. I feel this move could take the pair to $1.5600 in the near term, which was a consolidation zone through November and December last year.

GBP/USD
Click to enlarge

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