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GBP: Where To Target GBP Squeeze In GBP/USD & EUR/GBP?

Theresa May helped the pound recover from the abyss with some hopeful words about the path for Brexit. What’s next for sterling? The team at NAB  looks  at the next levels for GBP/USD and EUR/GBP:

Here is their view, courtesy of eFXnews:

UK PM finally sets out government strategy for Brexit negotiations.

May confirms recent press leaks that she is prepared for a hard, clean Brexit and is prepared to walk away if the EU wants to invoke punitive tariffs.

But assuming Article 50 is triggered in March, the ball will be in the EU’s court, with May warning the EU27 against an act of economic self-harm

For GBP we suspect there may be some additional limited upside near-term as investors get squeezed and adjust to the PM’s clearer strategy, but  in GBP/USD the 1.25-1.28 area should bring out sellers that cap gains.

For EUR/GBP, that might imply a slide to o.8450 – and perhaps even beyond  – on the growing realisation   that there are economic risks on both sides of the English Channel. That, however, may have to wait until after the dust has settled following Thursday’s ECB meeting.

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Yohay Elam

Yohay Elam

Yohay Elam: Founder, Writer and Editor I have been into forex trading for over 5 years, and I share the experience that I have and the knowledge that I've accumulated. After taking a short course about forex. Like many forex traders, I've earned a significant share of my knowledge the hard way. Macroeconomics, the impact of news on the ever-moving currency markets and trading psychology have always fascinated me. Before founding Forex Crunch, I've worked as a programmer in various hi-tech companies. I have a B. Sc. in Computer Science from Ben Gurion University. Given this background, forex software has a relatively bigger share in the posts.