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GBP/USD goes from strength to strength
Now that GBP/USD has traded as high as $1.5261 and broken moving averages on the way, the question on currency traders’ minds is ‘are we witnessing a healthy bounce in an otherwise bearish market, or has a corner been turned?’
Considering we are now just over a week away from a UK general election, where it’s widely perceived that we will not have a majority and – at present – unlikely a coalition government, we are set for a period of volatility and uncertainty. The backdrop to sterling at the moment is that GBP/USD has risen by 700 points in a little over two weeks. This has moved the currency into overbought territory on the relative strength index and this would make me more inclined to hunt for an opportunity to sell rather than buy.
With the timeline ticking towards the UK election, a cautious approach should be kept when looking at stops as intraday spikes could well materialise.