GBP/USD: Buy Sterling Politically Inspired Dips As Long As EUR/USD 1.15 Holds – SocGen

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The pound is sensitive to the political news while the euro is stable. How long can this last?

Here is their view, courtesy of eFXdata:

Societe Generale Cross Asset Strategy Research discusses GBP outlook and thinks that current political induced dips in GBP/USD are a buy as long as EUR/USD doesn’t change course and breaks below the important 1.15 level.

We favor buying sterling into politically-inspired weakness, buying GBP/USD dips as long as EUR/USD 1.15 holds.

It’s worth re-emphasizing that the main driver of GBP/USD remains EUR/USD. The EUR/GBP correlation with yields has been unstable and is now awful. Likewise the correlation between GBP/USD and real yields. There just isn’t a correlation between EUR/USD and EUR/GBP, but the correlation between EUR/USD and GBP/USD is high, and stable most of the time,” SocGen argues.

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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.