GBP/USD regains 1.28, but for how long amid UK election jitters?

The bears loosened their grip on the British currency, allowing a tepid bounce back above 1.28 handle, although investors remain whether the GBP/USD pair will manage to sustain the recovery amid ongoing uncertainty surrounding the UK election.

GBP/USD faces stiff resistance near 5-DMA at 1.2843

The spot is seen reversing a brief dip below 1.28 handle, as the pound finds some support from better poll results on the upcoming UK election. The latest UK Times poll showed that May's Conservatives lead shrunk to only 6 points against the Labour Party 43% vs. 37%. 

Moreover, Greek default news induced risk-off trades appear to have eased a bit, lending a helping hand to the recovery in the major. Also, weaker treasury yields across the curve continue to underpin the demand for the GBP as an alternative higher yielding asset.

Additionally, markets looked past the televised debate held between the UK PM May and Labour leader Corbyn, as focus remains on the Scottish first minister Sturgeon’s speech scheduled later today, while the US fundamentals could also provide fresh direction on the pair.

We have an empty UK docket today, despite full markets returning after yesterday’s holiday break, while the US calendar remains eventful, with the Core PCE price index, personal spending and consumer confidence data eagerly awaited.

GBP/USD Levels to consider            

Valeria Bednarik, Chief Analyst at FXStreet noted: “Technical readings in the 4 hours chart confirm the negative bias, as technical indicators have barely corrected oversold conditions before losing upward strength, whilst the price keeps developing below a bearish 20 SMA, now providing resistance around 1.2880. Support levels: 1.2790 1.2765 1.2730 Resistance levels: 1.2840 1.2885 1.2920.”