Currency Analysis Report 12-9-19…British Pound Hits A 31 Month High

The main event of the week for sterling is the general election on Thursday. Although 12% of the population haven’t voted yet, the Markets are pricing in a Conservative victory. Should the Conservative party gain a majority, the British Pound should continue to move higher.

On the Conservative Party's ongoing strength, Survation says, "the Conservative party has increased support to some extent in this polling amongst both Leave and Remain voters."

A BMG poll for the Independent showed the Conservatives up two points to 41% and Labour down 1 point to 32%.
A poll out from Survation for ITV's Good Morning Britain show had the Conservatives up 2 points to 45% and Labour down 2 points to 31%.

"Judging from recent polls, the most likely scenario is the Conservative party win majority government. If this scenario pans out, GBP/USD can edge higher towards 1.3500 over the next few weeks as the UK would be on the way towards an orderly Brexit on 31 January 2020," says Kim Mundy, a foreign exchange strategist with CBA.

It’s no wonder BlackRock Inc. and Goldman Sachs Group Inc. are among those on Wall Street touting the pound as a top trade for 2020 if he can win and push through a Brexit deal. In addition, Bank of America Merrill Lynch expects the currency to hit $1.39 by the end of 2020 and Goldman Sachs sees a rally of more than 4% versus the euro by the end of the first quarter.

So the question becomes how to participate on the long side on the British Pound?

The only level that sticks out to me of interest is the 1.30000 level.

As that level is a 4 hr demand zone.

But I honestly don't know if price will get back down to that level anytime soon. Nevertheless, that's the beauty of trading, nobody knows...except if you are part of the Smart Money.

This post is my personal opinion. I’m not a financial advisor, this isn't financial advise. Do your own research before making investment decisions.