The GBPUSD pair jumped to the best levels since May 2018 marginally above the 1.35 handle on Friday. The rally has accelerated on the outcome of parliamentary election in the UK, where the UK PM Boris Johnson won a majority. After a knee-jerk reaction, cable retreated partially and has settled around 1.34, staying elevated.
So, the UK managed to avoid a so-called hung parliament and the political uncertainty in the country decreased substantially as a result. Moreover, a large majority in Parliament will make it easier for Johnson to push his Brexit plans through, which is also positive for sterling. Also, the pound derives support from a general risk-on tone in the global financial markets amid further signs of a progress towards a partial trade deal between the US and China.
However, as the pair is around multi-month highs now, it doesn’t look attractive for opening long positions. As such, traders may have to push the prices lower before to buy sterling on a dip. Anyway, the short- and medium outlook for the pair has improves substantially now, with further gains may be ahead for the UK currency. In the immediate term, GBPUSD could switch into a consolidation mode before a possible bearish correction which should be reasonable and limited anyway.