With the intense focus on the French elections, one can forget about the announcement to hold elections in the UK, a declaration that triggered a massive short-squeeze. And after cable slipped from the highs of 1.29, the team at BNP Paribas states that GBP/USD is still cheap:
Here is their view, courtesy of eFXnews:
BNP Paribas FX Strategy Research notes that that market positioning in the GBP appear to have been unwound somewhat following the announcement of a June UK general election.
Despite that, BNPP notes that market positioning remains significantly short GBP, which suggests that the risk of a rally on the back of further short covering remains intact.
Furthermore, BNPP medium-term macroeconomic forecasting model signals that GBP/USD remains cheap versus its projected fair value of 1.31.
GBP/USD is trading circa 1.2790 as of writing.
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.
Share
