GBP/USD bears the burden of latest UK election polls amid broad USD strength

• GBP/USD stays on the back foot amid shrinking lead of Tories in December election polls.
• The Conservative manifesto, comments from leaders gain criticism.
• Trade optimism seems to have favored the greenback ahead of a busy calendar.

With the latest polls for the United Kingdom’s (UK) December election showing depreciation in the ruling Conservative Party’s lead, GBP/USD steps back to 1.2855 while heading into the London open on Wednesday.

Following Kantar’s publication of 11 points lead of Tories over the opposition Labour Party, YouGov came out with their survey results showing 11 points’ lead. The Guardian mentions claims that an increase in voter registration has been viewed as positive for Labour because the younger voters said to predominantly be signing up skew to the left.

While Tory manifesto is already under criticism for its omission of defense, failure to clearly mention promises on National Healthcare System (NHS) and Brexit deadline, toll over the key Conservatives add to the political pessimism for the ruling party. The Independent says that former senior judge accuses the United Kingdom’s (UK) Prime Minister (PM) Boris Johnson of being a 'risk taker' who 'chances his arm' while also conveying broad criticism over the mistake of Duchy of Lancaster.

Elsewhere, the United States (US) President keeps up the hopes of a phase-one deal with China despite media releases from the dragon nation alleges the US of unfair behavior. Even so, the US dollar (USD) stays mostly bid as investors keep trust on the greenback during the risk-on sentiment.

Although no major data/event is scheduled for publishing from the UK, the economic calendar in the US is full of key readings ranging from the second version on third quarter (Q3) Gross Domestic Product (GDP) to October month Durable Goods Orders. Additionally, data concerning the US Personal Income and Spending, coupled with Core Personal Consumption Expenditure (PCE) Index, will also decorate the stream.

Ahead of the data, TD Securities anticipate the Core PCE to stay around 0.7% YoY while also expecting Durable Goods Orders to recover to -1.0%.

Technical Analysis

A fortnight old rising trend line, at 1.2830, acts as immediate support holding key to a monthly low near 1.2770 while a falling resistance line from November 18, at 1.2950 now, could keep near-term upside restricted.