GBP/USD reversal continues and climbs above 1.2900

The pound extended gains during the American session against the US dollar and reached a fresh 5-day high above 1.2900. GBP/USD rose to 1.2921 and it was trading near the highs at 1.2905/10. 

Earlier today, the pair bottomed at 1.2768, the lowest since April 21, affected by political uncertainties ahead of next week UK election. The polls showing a declining lead of the Conservatives, affected the pound. The latest one helped eased the pressure  after reporting an increase of the lead over the Labour Party. 

UK election: Conservatives stretch lead over Labour

Cable not only recovered the lost ground but bounced sharply on the back of month-end flows and a weak US dollar against European currencies. The greenback remained near the lows even after the Chicago PMI index was revised (corrected) to 59.4 from the 55.2 reading reported earlier. 

Technical levels 

To the upside, resistance levels might be located at 1.2920/25 (Daily high / May 24 low), 1.2965 (May 22 low) and 1.3000. On the downside, support could be seen at 1.2885 (May 30 high), 1.2845 (20-hour moving average) and 1.2790/95 (May 30 low).