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Analysts at Citibank point out the weeks to September–end therefore are likely to be extremely choppy for sterling as the European Union waits to see if the United Kingdom will withdraw the Internal Market Bill. They forecast GBP/USD at 1.27 on a three month period and at 1.33 in a six to twelve-month horizon. 

Key Quotes:

“Brexit is re-emerging as a key driver for GBP, with the controversial new ‘UK Internal Market Bill’ raising concerns about no-deal Brexit once again. As a result, GBP has started to depreciate. Meanwhile, the UK has already been lagging behind peers in terms of the economic recovery. In terms of monetary policy, Citi’s view is that the MPC will cut to 0% at the November MPC and add £50bn QE.”

“The near 5.5% drop in cable from its highs at 1.35+ is of great concern. The pair has taken out strong support (55d MA at 1.2916) and below here lies the 200d MA at 1.2737. Resistance may find at 1.3278(March high) and 1.3482 (September high).”