GBP/USD revisits 7-1/2 week lows as Conservatives lose Darlington

Cable fell back to near 1.2713 (session low and the lowest level since April 18) after the latest report showed Darlington turned Red. 

Is ‘MAYhem’ on cards?

Loss in Darlington has squashed Tories’ hope of having any majority. The markets responded to the news by sending Pound lower to 1.2715 levels. As per latest reports, Wrexham and Llanelli have gone to Labour as well, while Conservatives have come out victorious in Harrogate. 

Overall, it is turning out to be a bad night for the Conservatives. It would be a mayhem for the ruling party if the election results in a hung parliament or a weak majority (odds of a Tory majority are falling fast). 

What if Labour wins the election?

Labour is in favor of softer Brexit, which is actually positive for the Pound. Furthermore, Labour’s pro-spending policies could mean high growth. So Corbyn victory may not be all that bad for the British Pound as initially predicted by many. A knee jerk sell-off could be short lived. 

GBP/USD Technical Levels

Key support levels are 1.2704 (5-DMA) - 1.2706 (Feb 2 high), 1.2618 (100-DMA) and 1.2586 (200-DMA). On the other hand, resistance levels are 1.2806 (50-DMA), 1.2885 (10-DMA) and 1.2949 (session high). The daily RSI has dipped below 50.00 levels and the MACD has turned negative.