The pound’s flash crash eventually ended in a significant downfall, as cable closes the week at the 1.24 handle. What’s next? The team at BNP Paribas has doubts about further moves. Here is their view, courtesy of eFXnews: We do not think the short-lived but violent overnight sell-off in GBP reflects a fundamental adjustment and hence we do not expect Sterling to re-test the lows seen during Asia trading hours. We do not think risk-reward favours chasing GBP lower from here for the following reasons. Firstly, FX investors already hold an extreme short position in GBP as signalled by BNP Paribas FX Positioning Analysis. Secondly, negative UK news flow should start to moderate as the EU and UK outline their starting positions for negotiation. Thirdly, GBP is already trading extremely cheaply versus where we estimate fair value even in a ‘hard Brexit’ scenario (BNP Paribas CLEER simulates fair value at 1.35 in a situation where the UK’s broad basic balance of payments deteriorates to -10%). Finally, the overnight sell-off likely reflects technicalities of FX option market positioning and thin Asia liquidity. Therefore, we do not think risk-reward is attractive to chase GBP spot lower from here. For lots more FX trades from major banks, sign up to eFXplus By signing up to eFXplus via the link above, you are directly supporting Forex Crunch. 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. Yohay's Google Profile View All Post By Yohay Elam Daily Look share Read Next Forex Weekly Outlook October 10-14 Anat Dror 7 years The pound's flash crash eventually ended in a significant downfall, as cable closes the week at the 1.24 handle. What's next? The team at BNP Paribas has doubts about further moves. Here is their view, courtesy of eFXnews: We do not think the short-lived but violent overnight sell-off in GBP reflects a fundamental adjustment and hence we do not expect Sterling to re-test the lows seen during Asia trading hours. We do not think risk-reward favours chasing GBP lower from here for the following reasons. Firstly, FX investors already hold an extreme short position in GBP as signalled by BNP… Regulated Forex Brokers All Brokers Sponsored Brokers Broker Benefits Min Deposit Score Visit Broker 1 $100T&Cs Apply 0% Commission and No stamp DutyRegulated by US,UK & International StockCopy Successfull Traders 9.8 Visit Site FreeBets Reviews$100Your capital is at risk. 2 T&Cs Apply 9.8 Visit Site FreeBets Reviews$100Your capital is at risk. 3 Recommended Broker $100T&Cs Apply No deposit or withdrawal feesTrade major forex pairs such as EUR/USD with leverage up to 30:1 and tight spreads of 0.9 pips Low $100 minimum deposit to open a trading account 9 Visit Site FreeBets ReviewsYour capital is at risk. 4 T&Cs Apply Visit Site FreeBets ReviewsYour capital is at risk. 5 Recommended Broker $0T&Cs Apply Trade gold, silver, and platinum directly against major currenciesUp to 1:500 leverage for forex trading24/5 customer service by phone and email 9 Visit Site FreeBets ReviewsYour capital is at risk.
