GBP Remains Firm, Yet Upside Could Be Limited

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The British pound has continued to point both whilst conservative lead in the polls. With their lead narrowing and a defiantly strong British pound, it begs the question as to whether cable’s upside could be limited.

City Index

This begs the question as to how much upside GBP/USD is capable of after such a stellar run and, at such giddy heights, surely leaves the British pound vulnerable to a volatile fall should polls get it wrong again.

As you’d expect, implied volatility has spiked higher this week with the 1-week IV implying ~2% move in either direction. Given realised volatility relatively low, it leaves room for plenty of movement in either direction.

With polls closing at 22:00 GMT and counting officially begins, we should begin to see some action from 22:30 – 23:00 GMT, with a result pencilled in for around 0200 GMT on Friday morning.

In today’s video, we look at price action on GBP/USD and highlight why a pullback is on the cards regardless of the result. Of course, the election’s outcome will have a direct impact on its timing and just how much more bulls can squeeze out of this move.

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