Technical analysis: Pound vs dollar supported at 50-day moving average a day ahead of elections

The UK currency has shown some mild strength in the early days of the election week, stopping the previous week's fall off the two-month high of 1.5500 above the 50-day simple moving average which now holds near 1.5000.

The GBP/USD pair was down in the first half of April and even touched a six-year low of 1.4565. The second half saw the pair rallying but lost momentum by the end of the month and ended the week to 1 May down.

So far in the election week, Sterling is up 0.57% against the greenback helped by the gains since 5 May.

As per the latest opinion poll by Lord Ashcroft, the Conservatives have a two-point lead over Labour but YouGov and Populus polls still show the two sides neck-and-neck.

The new UK government is more likely to be formed by the Labour party as per an analysis of recent opinion polls, easing worries related to 'Brexit'.

Conservatives have called for a referendum to decide the future of UK-EU relations so a win by that side will likely see a sharp slide in stocks and the currency.

The immediate near term support for GBP/USD is 1.5090 and then comes the 1.5000 mark. A break of the first one will increase the chances of a retest of the April low even though 1.4900 and 1.4800 will be the two levels to watch before that.

In case of a move higher, 1.5400 and 1.5500 will be first eyed and then the February high of 1.5554. A move beyond that will take the pair to its highest since early January, opening doors to 1.6000 and then 1.6200.