GBP/USD consolidates recent strong gains to multi-month tops, around mid-1.3100s

• Increasing odds of a majority for Conservatives continue to underpin the GBP.
• GBP/USD seemed rather unaffected by mostly softer UK macroeconomic data.
• Investors now seemed reluctant ahead of the UK election and FOMC decision.

The GBP/USD pair extended its sideways consolidative price action around mid-1.3100s, or multi-month tops, and moved little post-UK macro releases.

Data released this Tuesday came in to show that the UK economic growth remained flat in October as compared to a modest growth of 0.1% expected, albeit marked a slight improvement from a 0.1% contraction recorded in the previous month.

GBP supported by UK political optimism

Adding to the disappointment, total industrial output recorded a modest growth of 0.1% as against 0.2% expected and -0.3% last. Conversely, manufacturing output arrived at +0.2% MoM in October versus 0.0% expectations and -0.4% booked in September.

The softer UK data, however, failed to impress bearish traders or exert any meaningful downward pressure on the British pound, which remains well supported by increasing odds of a majority for Conservatives at the upcoming election on December 12.

Meanwhile, bulls seemed to lack any strong conviction, rather seemed reluctant to place any aggressive bets and might prefer to stay on the sidelines ahead of the key event risk from the UK. This along with the latest FOMC policy update will help determine the pair's near-term trajectory.

Technical levels to watch