GBP/USD struggles to recover from session lows as DXY tests 99

The GBP/USD pair refreshed its session low around 1.2930 in the last hour and is having a difficult time recovering from there as the US Dollar Index continues to show a solid performance on Monday. As of writing, the pair was trading at 1.2938, down 0.32% on the day. 

Investors finally shifted their focus back to the Fed as the second round of the presidential election in France came to a conclusion with the market's favorite candidate Macron comfortably defeated his far-right rival Marine Le Pen to become the next president of France. A delayed impact of the heightened June hike expectations and the solid nonfarm payroll growth in the U.S. are being felt on the greenback on Monday, with the US Dollar Index testing the 99 handle. At the moment, the index is at 99.02, up 0.6% on the day.

In the meantime, Prime Minister Therese May seems to be on her way to an easy victory in the snap election that will be held on June 8. A recent poll by The Guardian revealed that May's Conservative Party is seen coming on top with 49% of the votes, 22 points ahead of the Labour party. 

• UK: Early local election results indicate a strong showing for the Tory Party - BBH

Technical outlook

Ahead of the important 1.30 psychological level, the pair could find resistance at 1.2964 (Apr. 28 high). With a break above 1.30, the pair could aim for 1.3055 (Sept. 28 high). To the downside, supports align at 1.2900 (psychological level), 1.2840 (Apr. 27 low) and finally 1.2760 (Apr. 21 low).

• GBP/USD bullish on a close above 1.3000 – UOB