GBP: BoE Cut Likely; GBP/JPY Shorts Most Attractive As GBP/USD Vulnerable To Test 1.28 – SocGen

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The Bank of England is convening for its first rate decision of 2020 and bond markets see it as a total coin-flip. How will the pound react?

Here is their view, courtesy of eFXdata:

 Société Générale Research discusses GBP outlook and sees a scope for near-term weakness heading into this week’s BoE meeting. 
Sterling is the pivot. There’s a lot of focus on Brexit this week, although the UK will leave the EU with a whimper, at least initially. On we go to trade negotiations with both the EU and US, and speculation about whether the UK will seek an extension to the transition period. We remain bullish of sterling on a longer-term view but nervous for the months ahead. Trade headlines will be challenging, and the week’s main event is the MPC meeting this Thursday,” SocGen notes.
Markets price a cut in H1, but are unsure after last week’s data, whether it comes this week. We think it will, and sterling could soften a little, with GBP/JPY shorts the most attractive cross, but GBP/USD also vulnerable to another move to 1.28,” SocGen adds.

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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 the 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.