Cable at six-week highs but can buyers break through 1.30 this time around?

Technical Analysis

Author: Justin Low | gbpusd

GBP/USD knocks on the door of the 1.3000 handle again

GBP/USD D1 03-12
The high today touches 1.2995, which is the highest level since 22 October as buyers continue to exert further dominance in the pair. However, the 1.3000 level continues to prove to be a tricky spot as we have seen price try to move close to the figure level on two other occasions in the past month only to have fallen short.

For cable, it is all about the UK election sentiment for the most part but the dollar may also be hampered by the fact that US-China trade talks could still lead to nowhere next year and that the US economy is being hurt by all the tariffs and trade conflict.

Those worries are starting to surface over the last two days and could lend towards a break higher in the pair, despite election uncertainty still somewhat present.

A Tory victory remains one of the more expected results going into next week but as we all know when it comes to UK politics over the last few years, nothing is a given.

As such, I have remained skeptical of any pound gains on election sentiment above 1.3000 against the dollar - at least considering the current mood in UK opinion polls.

However, when you factor in the dollar sentiment above, we could see stops being run above 1.3000 and that could see traders start to price in a majority win for Boris Johnson too.

Given that possibility, there is potential for an upside break for the pound this time around and one that could see traders really start to price in an election outcome - which creates for an opportunity to either fade it or build on it come next week.

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