GBP/USD moves away from highs, recovery limited

The pound pulled back against the US dollar after making a run to levels near 1.2900. GBP/USD peaked earlier during the American session at 1.2887, the highest since Friday but then pulled back, erasing most of the daily gains. 

The retreated from the highs found support at 1.2835/40, at the 20-hour moving average and currently trades at 1.2855, 35 pips above yesterday’s cosign price. 

Despite moving away from the highs, it is still headed toward the second daily gain in a row. The pound continues to recover after losing more than a hundred pips on Friday. 

The pair is likely to remain volatile and probably under pressure at moments taking into account that in just nine days, UK will hold general elections. The latest polls showed that the Conservatives have a lead of just six to eigth points over Labour. 

Technical levels 

To the upside, resistance levels might be located at 1.2900 (psychological), 1.2925 (May 24 low) and 1.2965 (May 22 low). On the downside, support could be seen at 1.2835 (American session low), 1.2790/95 (daily low) and 1.2775 (May 26 low).