The pound and FTSE are inching higher as the UK election results come in. Labor, as expected, won a landslide victory with 411 seats, marking gains of 210 seats at the time of writing. The outgoing Conservatives won just 119 seats, losing -248.The pound’s reaction has been tepid, although it holds on to gains from across the week. GBP/USD trades up 0.9% this week at a three-week high, although this is also a USD weakness story. EUR/GBP is virtually unchanged across the week.The Labour Party had maintained a strong lead in the polls across the election campaign, and on results night, there were no real surprises. Therefore, the result had already been priced.No major changes to fiscal policy are expected, given the limited headroom for such moves and the party manifesto. Therefore, the ramifications for the Bank of England will be limited. We will know more about where Labour is heading with fiscal policy in the Autumn budget later in the year.The new center-left government could bring some much-needed stability to the UK. UK assets could benefit from the safe-haven appeal, particularly in light of the more volatile political backdrops elsewhere. The domestically focused FTSE 250 is a standout winner, up around 1% on the day. The more international FTSE 100 trades 0.15% higher, with housebuilders leading the rally. The move higher in the sector comes amid Labour’s plans to simplify planning and ramp up house building.For now, the biggest mover for the pound will likely be the Bank of England as policymakers emerge from the blackout period, which they entered into as news broke that UK inflation dropped to the target level of 2%. The markets will be watching closely to see whether the central bank is preparing for a possible August interest rate cut. This would move the needle more than the Labour win in the elections, at least for now.
GBP/USD forecast – technical analysisGBP/USD has recovered from 1.26, the June low and is extending gains towards 1.28. Supported by the RSI above 50, buyers will look to rise above 1.28 towards 1.2890 the 2024 high.On the downside, support can be seen at 1.27, the round number ahead of 1.26 the June low. 
FTSE forecast – technical analysis
The FTSE has recovered from the 8100 low, rising above 8200 towards the June high of 8365. Buyers will need to rise above the multi-month rising trendline to bring 8365 into focus. Support is seen at 8100. 
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