06.12.201900:55 Forex Analysis & Reviews: Pound's balancing act before decisive election

The British currency froze in anticipation of the upcoming changes that are associated with the upcoming elections in the country. According to experts, they will determine the further dynamics of the pound. Sterling is currently dominated by conflicting drivers, when turbulence alternates with a lull period.

The pound demonstrated the wonders of staying in balance on Wednesday, November 4, rising sharply after a long stagnation. The GBP/USD pair has skyrocketed after negotiations between the British government and US President Donald Trump. According to experts as another driver for the sterling's growth, the Conservative Party of Great Britain is highly likely to win. Against this background, the pound was growing rapidly, and this trend continues.

According to analysts, the dizzying rise in the price of the British currency is associated not only with its strengthening, but also with the weakening of the greenback. On Wednesday, the dollar index updated multi-week lows, and the pound took this opportunity.

The dynamics of the pound became a mirror of the ups and downs of the election campaign, instantly reacting to current events. At present, the main rivals of Prime Minister Boris Johnson, the Labour Party, are either gaining a majority of the votes or are on the verge of failure. The British currency also demonstrates similar somersaults, emerging from a state of stagnation and making a giant price leap.

On Wednesday, the pound rose above 1.3000 in the wake of reports that the Conservative Party of Great Britain is confidently holding the palm in the race. It was ahead of the Labour Party by 12 points, providing invaluable support to the pound. In addition, the current situation increases the chances of approving a deal with Brussels in early January 2020.

Sterling is currently celebrating a victory: it managed to overcome the most important key level of 1.3000, which the GBP/USD pair has not succumbed to since October 2019. Yesterday, the pair began to move forward, rising sharply to 1.3060.

As a result, the GBP/USD pair entered the upward trend, but periodically stagnated and even dropped to 1.3042–1.3043. However, these hitches were not a signal for a fall, but a springboard before the next jump of the British currency.

After a while, the pound turned into a battering ram and managed to get to the psychologically important level of 1.3100. The market delightedly watched the British currency's surge.

Sterling also began on a major note on Thursday morning, December 5. Not only did it not lose its gained positions, but also managed to strengthen them. The GBP/USD pair ran in the range of 1.3111–1.3112, demonstrating a clear tendency to rapid growth. At the same time, buyers of the pound, who became the hero of the day, intensified.

The pair met market expectations in the future. In a short period of time, the GBP/USD pair soared almost threefold. At the moment, it is trading within 1.3136-1.3137, trying to get to the following peaks.

Many experts believe that the British currency will not lose stability with any outcome of the election. The market believes in the reliability and strength of the pound, which has repeatedly demonstrated growth in difficult circumstances. The positive dynamics of sterling helps it strengthen and grow, analysts summarize. Many experts expect the GBP/USD pair to rise to 1.3900 in 2020. In connection with the current price pound surges, growing exponentially, this forecast may become a reality.